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HE  WATERS  PIERCE  CASE 
IN  TEXAS 


Compiled  from  the  Series  of  Press  Articles 
Entitled : 

battling  With  a Great 
Corporation 


By  FREDERICK  UPHAM  ADAMS 

Author : 

esident  John  Smith,”  “The  Kidnapped  Millionaires,”  “John  Burt,” 
“TheBottom  of  theWell,”  “John  Henry  Smith,” 

Etc.,  Etc. 


PRICE  TWENTY-FIVE  CENTS 


1908 

PUBLISHED  BY  SKINNER  & KENNEDY 
SAINT  LOUIS.  MO. 


HENRY  CLAY  PIERCE 


Hi, \ 


INTROD  U CTION 


By  Louis  J.  Wortham,  Editor  Fort  Worth  Star. 


Those  who  have  kept  in  touch  with  economic  thought 
and  its  literature  in  the  last  twenty  years  need  no  intro- 
duction to  Frederick  Upham  Adams,  and  will  not  require 
extended  comment  on  his  writings.  Years  before  it  was 
popular  or  profitable  to  take  issue  on  the  great  questions 
which  now  occupy  the  political  stage,  Mr.  Adams  fore- 
saw the  coming  conflict,  and  outlined  with  wonderful 
accuracy  the  lines  on  which  it  would  be  waged. 

Like  many  who  have  attained  distinction  in  the  liter- 
ary field,  Mr.  Adams  obtained  his  early  training  in  the 
practical  and  exacting  school  of  journalism.  He  was  a 
reporter  on  Chicago  papers  in  the  exciting  period  when 
the  great  labor  movement  gained  its  foothold.  He  was 
a witness  of  the  Haymarket  Riot,  and  attained  his  first 
recognition  as  a writer  by  his  earnest  and  successful 
championship  of  the  cause  of  the  oppressed  coal  min- 
ers of  Illinois  and  Indiana,  at  a time  when  merciless  op- 
erators did  not  hesitate  to  starve  whole  communities  for 
the  sake  of  increasing  dividends  on  watered  stocks. 

His  writings  attracted  the  attention  of  such  men  as 
Edward  Bellamy,  Henry  D.  Lloyd  and  Henry  George.  It 
was  at  the  suggestion  of  the  latter  that  Mr.  Adams  wrote 
his  first  book,  “President  John  Smith.”  This  was  the 
original  contribution  of  note  to  that  now  important 
school  of  American  fiction  which  has  for  its  motive  a 
consideration  of  the  issues  incident  to  the  rapid  develop- 
ment of  industrial  trusts.  It  was  a prediction  of  the 
growth  and  ultimate  supremacy  of  organized  wealth — 
one  written  at  a time  w’hen  the  mass  of  the  people  and 
politicians  and  editors  scoffed  at  the  suggestion  that  mon- 
opolies would  be  able  to  secure  a permanent  foothold 
in  a country  so  great  in  .extent  and  rich  in  resources  as 
the  United  States. 

Mr.  Adams  wrote  “President  John  Smith”  in  1892, 
and  published  it  as  a serial  in  the  Chicago  Times  in  the 
following  year.  The  trusts  were  then  in  their  swaddling 
clothes,  but  the  picture  of  their  future  reads  as  if  written 
yesterday.  In  book  form  the  novel  attained  instant  pop- 
ularity, and  with  the  profits  Mr.  Adams  established  “The 
Xew  Time  Magazine,”  the  pioneer  periodical  devoted  to 
such  now  popular  experiments  as  seek  direct  legislation 
through  the  initiative  and  referendum,  the  government 
ownership  of  railroads,  the  municipal  ownership  of  public 
utilities,  income  and  inheritance  taxes,  and  other  radical 
conceptions  which  have  already  been  installed  in  some 
of  the  nations  of  Europe,  and  which  are  now  claiming 
the  thought  of  this  republic. 

Hardly  a writer  and  not  a politician  now  in  the 
public  eye  then  cared  or  dared  take  the  advanced  ground 
occupied  by  Frederick  Upham  Adams.  He  boldly  asserted 
that  the  logic  of  events  pointed  to  the  inevitable  supre- 
macy of  the  trusts,  asserted  that  it  was  an  evolutionary 
movement  which  could  not  be  thwarted  or  much  re- 
tarded by  legislation  or  judicial  mandate,  and  insisted 
then,  as  he  does  now,  that  since  the  causes  were  basic 
the  remedies  must  also  be  basic.  His  contention  was  and 


is  that  certain  services  and  industries  naturally  are  mo- 
nopolistic, and  that  such  natural  monopolies  must  be 
owned  or  controlled  by  the  State,  or  by  the  National 
Government. 

Between  1893  and  1897  there  were  more  than  750,000 
copies  of  “President  John  Smith”  sold  in  the  United 
States.  Certain  editors  and  politicians  in  Texas  have 
presumed  to  question  the  right  of  Mr.  Adams  to  discuss 
the  issues  involved  in  the  prosecution  of  the  Waters  Pierce 
Oil  company.  Many  of  these  gentlemen  probably  never 
heard  of  Mr.  Adams  until  his  first  article  on  that  subject 
appeared.  It  will  interest  them  to  know  that  in  1896 
more  than  60,000  copies  of  “President  John  Smith”  were 
in  circulation  in  Texas,  and  that  such  was  its  influence 
that  twenty  or  more  Texas  papers  bore  his  name  at  the 
head  of  their  editorial  pages  as  their  candidate  for  Pres- 
ident of  the  United  States.  Yes,  Texas  was  willing 
to  listen  to  Mr.  Adams  at  a time  when  many  of  his 
present  critics  were  puzzling  over  their  school  books, 
and  Texas  is  always  willing  to  listen  to  a man  who  has 
an  intelligent  message  to  deliver. 

Millions  of  people  have  read  Mr.  Adams’  studies  of 
the  history  of  the  framing  of  the  Constitution  of  the 
United  States,  as  contained  in  his  masterly  series  of 
essays,  entitled,  “The  Shades  of  the  Fathers.”  In  recent 
years  the  leading  papers  of  the  country  have  published 
his  series  of  current  economic  studies  under  the  title  of 
“Colonel  Monroe’s  Doctrine.”  In  “The  Kidnapped  Mil- 
lionaires” IMr.  Adams  presented  the  most  vivid  portrait 
ever  drawn  of  our  system  of  finance  and  industry,  and 
he  pictured  and  predicted  with  almost  uncanny  accuracy 
the  panic  and  business  depression  which  has  marked  this 
present  year. 

Space  does  not  permit  mention  of  his  many  other 
books  and  contributions  to  literature  in  recent  years. 
The  wide-spread  interest  all  over  the  United  States  in 
municipal  ownership  has  its  unquestioned  origin  in  a 
series  of  articles  published  five  years  ago  by  Mr.  Adams, 
entitled  “How  Cities  are  Governed  in  Great  Britain.” 
These  were  prepared  after  a year  spent  in  the  study  of 
the  result  attained  by  municipalities  in  Scotland  and  Eng- 
land, and  were  published  in  the  leading  papers  in  every 
large  city  in  the  United  States. 

Notable  work  of  this  character  qualifies  Mr.  Adams 
to  write  with  a measure  of  authority  on  economic  ques- 
tions— and  the  attempt  to  oust  the  Waters  Pierce  Oil 
company  from  Texas  and  to  confiscate  its  property  by 
process  of  law  involves  a question  of  overshadowing 
economic  interest  to  the  whole  country,  and  one  which, 
as  Mr.  .^dams  asserts,  must  finally  be  settled  by  the 
people,  and  not  by  the  plottings  of  unscrupulous  poli- 
ticians. 

Those  Texas  editors  who  have  presumed  to  question 
the  right  of  Frederick  Upham  Adams  to  address  the  peo- 
ple of  the  Lone  Star  State  as  a democrat,  must  be  rc- 


— 3— 


/ 


>/ 


minded  that  he  has  probably  done  more  than  any  other 
individual,  with  the  single  exception  of  William  Jennings 
Bryan,  to  arouse  public  thought  and  action  along  the 
lines  which  will  be  incorporated  in  the  next  Democratic 
National  Platform.  Mr.  Adams  was  the  personal  selec- 
tion of  Mr.  Bryan  for  the  important  position  of  Chief 
of  the  Literary  and  Press  Bureau  in  the  campaign  of 
1896.  In  the  campaign  of  1892  Mr.  Adams  had  filled 
with  distinction  the  same  position  in  the  Western  branch 
of  the  Democratic  National  Committee— the  campaign 
which  placed  Grover  Cleveland  in  the  presidential  chair — 
and  it  was  not  his  fault  that  Mr.  Bryan  did  not  achieve 
victory  in  the  famous  “First  Battle.” 

In  the  campaign  of  1896  Mr.  Adams  furnished  edi- 
torials and  campaign  material  for  more  than  7,500  demo- 
cratic papers.  Mr.  Adams  enjoys  the  warm  personal 
friendship  and  admiration  of  William  Jennings  Bryan, 
has  traveled  with  him  in  England  and  on  the  Continent 
on  his  tours  of  investigation,  and  may  be  depended  on 
to  do  splendid  service  under  his  leadership  in  the  com- 
ing campaign. 

Whatever  may  be  said  of  the  merits  of  the  contro- 
versy, it  cannot  be  denied  that  Mr.  Adams  has  rendered 
the  people  of  Texas  a service  by  preparing  a history  of 
the  incidents  which  have  surrounded  the  Waters  Pierce 
Oil  company.  He  did  not  undertake  this  task  until  he 
was  in  possesion  of  what  he  believed  to  be  absolute  proof 
that  this  great  trading  concern  was  not  a part  of  the 
Standard  Oil  Trust,  and  until  he  was  convinced  that  its 
record  and  its  policy  have  been  deliberately  misrepre- 
sented and  vilified  by  reckless  and  desperate  politicians^ 
aided  and  abetted  by  business  rivals. 

For  more  than  four  months  Mr.  Adams’  articles 
appeared  weekly  in  the  leading  papers  of  Texas.  F’or 
years  the  enemies  of  Senator  Bailey  have  conducted  a 


campaign  based  on  falsehood.  Jealous  of  his  genius  and 
of  the  love  and  admiration  which  Texans  bear  to  him, 
they  hoped  to  encompass  his  political  ruin  by  linking 
his  name  with  the  Standard  Oil  company  through  the 
Waters  Pierce.  Mr.  Adams  has  helped  to  rout  them. 
He  has  piled  fact  on  fact  with  merciless  methods  of  ac- 
curacy and  logic.  One  by  one  he  has  disproved  they 
charges  made  against  Mr.  H.  C.  Pierce  and  his  company/ 
The  best  writers  and  lawyers  of  Texas  have  attempted 
to  counteract  the  effect  of  these  articles  from  the  pen 
of  the  author  of  “President  John  Smith,”  but  have 
not  been  able  successfully  to  refute  one  essential  point 
in  the  history  of  the  case  as  he  presents  it. 

Mr.  Adams  has  placed  the  undeniable  facts  and  the 
official  court  records  in  public  print,  and  they  have  been 
read  by  thousands  who  now  know  the  truth  and  who  at 
last  comprehend  the  motives  of  those  whose  purpose  has 
been  deliberately  to  deceive  them. 

The  people  of  Texas  are  sincerely  anxious  to  correct 
by  legal  methods  the  corporate  abuses  which  have  de- 
veloped with  the  growth  and  prosperity  of  the  State,  but 
they  have  no  desire  to  punish  a corporation  because  of 
its  success,  neither  is  it  their  intent  to  visit  on  Mr.  Pierce 
or  his  company  a vengeance  inspired  by  falsehood  and 
directed  against  Senator  Joseph  W.  Bailey. 

The  story  of  the  Waters  Pierce  Oil  company  as  told 
by  Mr.  Adams  is  far  different  from  the  one  with  which 
political  audiences  have  become  familiar  from  listening 
to  the  orators  who  have  preached  the  gospel  of  hate.  Mr. 
Adams  is  secure  in  his  fame  as  an  author  and  a historian, 
but  the  chapters  which  follow  rest  on  more  than  the 
untarnished  reputation  of  a writer;  they  are  fortified  by 
official  court  records  and  the  sworn  evidence  of  unim- 
peachable witnesses. 

LOUIS  J.  WORTHAM. 


BATTLING  WITH  A GREAT  CORPORATION 


Chapter  I. 

WHAT  WILL  BE  PROVED 


A lawyer,  in  arguing  a case  before  judge  or  jury, 
usually  begins  by  presenting  a digest  of  the  points  he 
proposes  to  prove  or  disprove  by  creditable  witnesses  or 
by  the  citation  of  facts  and  evidence.  I shall  follow 
this  method  of  procedure,  and  offer  this  brief  preface 
to  the  summary  of  points  which  will  then  be  stated: 

The  prosecution  of  the  Waters  Pierce  Oil  company 
has  been  marked  by  a campaign  of  misrepresentation  and 
by  a distortion  and  a suppression  of  facts  which  has 
placed  that  trading  organization  in  a false  light  before 
the  people  of  Texas  and  of  the  great  Southwest  in  which 
it  was  founded,  and  the  consumers  of  which  it  has  served 
for  more  than  a third  of  a century.  I take  it  that  the 
intelligent  citizens  of  that  section  of  the  country  are  de- 
sirous of  correcting  those  corporate  abuses  which  have 
developed  with  new  and  changing  systems  of  industry, 
but  I also  believe  and  know  that  they  have  no  intent  to 
wreak  vengeance  on  a corporation  because  of  its  suc- 
cess, neither  is  it  their  desire  to  inflict  unmerited  punish- 
ment on  a business  concern  or  an  individual,  especially 
when  such  punishment  is  demanded  by  demagogues  and 
politicians  seeking  personal  advantage  by  appealing  to 
passion  and  prejudice. 

I shall  prove  conclusively  that  a campaign  of  this 
character  has  been  waged  against  the  Waters  Pierce  Oil 
company,  and  I shall  prove  that  most  of  the  leaders  in 
this  crusade  of  abuse  and  misrepresentation  are  poli- 
ticians who  have  forfeited  the  respect  and  confidence  of 
their  constituents,  and  who  now  seek,  offices  and  patron- 
age by  an  attempt  to  charge  the  Waters  Pierce  Oil  com- 
pany with  offenses  of  which  it  is  innocent. 

The  points  and  issues  to  which  I shall  give  special 
attention  may  thus  be  enumerated: 

First:  The  industrial  advantages  secured  by  the 

Waters  Pierce  Oil  company  is  not  the  result  of  a trade 
conspiracy.  It  is  an  incident  in  a world-wide  revolu- 
tion which  has  decreed  that  the  former  system,  or  lack 
of  system,  of  cut-throat  competition  shall  be  supplanted 
by  one  in  which  each  man’s  hand  is  not  constantly  raised 
against  his  fellows.  It  is  an  incident  in  that  vast  evolu- 
tionary change  which  has  decreed  that  industrial  co-opera-' 
tion,  in  some  form,  shall  take  the  place  of  merciless  and 
destructive  competition.  It  raises  the  most  vital  question 
which  ever  has  confronted  civilization.  It  cannot  be 
solved  by  Texas;  it  cannot  be  finally  solved  by  the  United 
States;  it  will  be  adjusted  by  irresistible  evolutionary 
happenings,  and  the  problem  is  one  demanding  patriotic 
thought  and  sober  action,  and  not  a blind  response*  to 
every  expedient  suggested  by  reckless  and  heedless  poli- 
ticians. 

- Second:  The  charge  has  been  made  and  the  general 
impression  created  that  the  Waters  Pierce  Oil  company 
was  founded  by  the  Standard  Oil  Trust,  and  that  from  its 
inception  it  has  masqueraded  as  an  independent  company, 
but  that  in  reality  it  has  ever  been  an  integral  part  of  a 
Rockefeller  conspiracy.  I shall  prove  that  the  founda- 
tion for  the  Waters  Pierce  Oil  company  was  laid  by 
John  Robert  Finlay  when  John  D.  Rockefeller  was  a 
school  boy,  and  that  Henry  Clay  Pierce  pushed  it  to  suc- 
cess long  before  the  Standard  Oil  company  was  able  to 
challenge  opposition.  I shall  prove  that  Henry  Clay 


Pierce,  and  no  one  else,  planned  and  brought  about  the 
trade  supremacy  of  the  Waters  Pierce  Oil  company  in 
Texas  and  the  Southwest. 

Third:  The  chief  complaint  against  the  Waters' 

Pierce  Oil  company  is  that  the  Standard  Oil  Trust  owns 
a majority  of  its  stock.  I shall  prove  that  this  stock  was 
acquired  by  the  Rockefeller  interests  against  the  protest^ 
of  Mr.  Pierce,  and  I shall  also  prove  that  there  was  then 
no  law  and  no  public  sentiment  against  one  corporatron 
holding  the  stock  of  another. 

Fourth:  I shall  prove  that  for  more  than  twenty- 

five  years  Henry  Clay  Pierce  has  stoutljr  and  successfully 
resisted  all  attempts  of  the  Standard  Oil  company  to 
subject  the  Waters  Pierce  to  its  control,  and  I shall  also 
prove  that  Mr.  Pierce  is  the  one  oil  merchant  in  the 
United  States  who  has  been  able  to  perpetuate  the  name 
and  independence  of  a great  trading  company  against  the 
aggressions  of  the  Standard — and  yet  he  and  his  company 
have  been  singled  out  for  the  most  merciless  and  unfair 
prosecution  ever  conducted  in  the  name  of  a State. 

Fifth:  I shall  prove  conclusively  that  the  Waters 

Pierce  Oil  company  has  succeeded  in  Texas  and  in  its 
southwestern  territory,  not  because  of  any  association  or 
affiliation  with  the  Standard  Oil  Trust  or  with  any  other 
corporation,  but  that  it  attained  its  present  trade  advan- 
tage by  installing  a vast  and  scientific  system  of  distribu- 
tion and  marketing,  through  which  it  has  been  able  to 
supply  oil  and  its  products  at  prices  which  individuals  and 
competing  companies  have  been  unable  to  meet.  In  other 
words,  I shall  show  that  the  complaint  against  the  Waters 
Pierce  is  not  that  its  prices  are  too  high,  but  rather  that/^ 
they  are  too  low.  Its  annihilation  is  demanded  by  in- 
terests which  are  intent  on  making  Texas  pay  more  for 
oil. 

Fourth:  There  have  been  two  Waters  Pierce  Oil 

companies.  The  first  was  organized  in  1878,  and  was 
legally  dissolved  in  1900.  The  second  and  present  Waters 
Pierce  Oil  company  was  organized  under  the  laws  of  v 
Missouri  on  May  29,  1900,  and  was  granted  a permit  to  do 
business  in  Texas  on  May  31,  of.  the  same  year.  The 
first  company  is  dead,  but  a deliberate  and  persistent  at- 
tempt is  being  made  to  charge  the  present  Waters  Pierce 
Oil  company  with  responsibility  for  the  offenses  commit- 
ted by  its  predecessor. 

Fifth:  It  has  repeatedly  been  charged  and  is  widely 

believed  that  the  original  Waters  Pierce  Oil  company 
was  expelled  from  Texas  on  conviction  of  being  a trust. 

I shall  prove  that  no  such  verdict  was  rendered,  and 
that  the  company  was  convicted  of  trivial  and  technical 
violations  of  the  law;  violations  which  in  no  way  impli- 
cated it  as  a trust  or  a monopoly. 

Sixth:  It  has  repeatedly  been  charged  and  is  widely 

believed  that  the  original  Waters  Pierce  Oil  company  was 
expelled  from  Texas  mainly  on  account  of  its  alleged 
connection  or  affiliation  with  the  Standard  Oil  trust.  I 
shall  prove  that  all  evidence  intended  to  show  that  it 
was  thus  connected  with  the  Standard  was  excluded  from 
the  jury,  and  that  the  presiding  judge  distinctly  ruled  that 
the  jury  should  not  take  into  consideration  the  fact  that 
certain  individual  stockholders  of  the  Waters  Pierce  had 
signed  the  Standard  Oil  agreement  of  1882. 


Seventli;  I shall  prove  that  the  anti-trust  laws  of 
Texas  are  so  sweeping  in  their  prohibitions  that  no  asso- 
ciation of  individuals  can  conduct  business  under  the  rec- 
ognized methods  of  competition,  without  violating  said 
anti-trust  laws.  I shall  show  that  a rigid  enforcement  of 
these  laws  would  annihilate  all  business,  and  I shall  also 
prove  that  the  prosecuting  officials  use  discretionary 
power  in  enforcing  these  laws,  thus  exercising  a most  dan- 
gerous and  unfair  prerogative,  and  one  which  has  been 
wielded  almost  solely  for  political  advantage,  or  for  the 
purely  mercenary  motive  of  collecting  fees  and  commis- 
sions. 

Eighth:  The  accusation  has  been  made  that  the 

original  Waters  Pierce  Oil  company  was  dissolved  by  il- 
legal or  irregular  methods.  I shall  demolish  this  charge 
by  irrefutable  proof,  taken  from  the  official  records  of 
the  State  of  Missouri. 

Ninth:  The  accusation  has  been  made  that  the  pres- 
ent Waters  Pierce  Oil  company  is  a fraudulent  reorgani- 
zation of  the  former  one.  I shall  disprove  this  charge 
by  evidence  so  plain  and  complete  that  its  validity  can- 
not be  questioned. 

Tenth:  One  of  the  most  familiar  charges  against  the 
present  company  is  to  the  effect  that,  first:  It  was  ad- 

mitted into  Texas  in  consequence  of  influence  unfairly 
exercised  by  the  Hon.  Joseph  W.  Bailey.  Second:  That 

it  was  granted  a permit  because  of  a false  statement 
signed  by  Henry  Clay  Pierce,  in  which  statement  that 
gentleman  specifically  swore  that  his  company  was  in 
no  way  connected  with  the  Standard  Oil  trust.  Third: 
That  the  Waters  Pierce  Oil  company  was  granted  a per- 
mit to  enter  Texas  through  the  deliberate  deception  of 
her  State  officials,  and  that  the  whole  transaction  was 
based  on  trickery  and  evasion. 

I shall  expose  the  absolute  falsity  of  each  and  all  of 
these  respective  charges,  and  shall  show  that  they  have 
been  invented  and  circulated  by  politicians  who  must  have 
known  the  official  facts  to  the  contrary. 

Eleventh:  The  most  outrageous  falsehoods  have 

been  given  wide  circulation  concerning  the  affidavit 
signed  by  Henry  Clay  Pierce.  I shall  present  the  plain 
and  indisputable  facts  concerning  this  incident,  and  shall 
reveal  the  plot  by  which  a desperate  attempt  has  been 
made  to  smirch  the  honor  and  reputation  of  a gentleman 
whose  business  record  for  more  than  a third  of  a century 


refutes  the  foul  charge  which  unprincipled  demagogues 
! have  made  against  him. 

Twelfth:  I shall  indicate  conclusively  that  there  is 

an  organized  crusade  against  the  Waters  Pierce  Oil  com- 
pany and  its  chief  executive,  and  I believe  that  those  who- 
read  these  chapters  will  agree  with  me  that  the  motive 
of  these  conspirators  is  not  to  give  Texas  cheaper  oil 
or  more  industrial  freedom,  but,  on  the  contrary,  that  a 
few  politicians  seek  power  and  patronage  by  attempting 
to  place  on  the  shoulders  of  this  corpora-tion  all  the  of- 
fenses and  unpopularity  of  the  Standard  Oil  trust,  and 
that  they  are  bent  on  destroying  the  national  fame  and 
usefulness  of  Senator  Joseph  W.  Bailey  by  this  despicable 
method. 

These  chapters  are  printed  substantially  as  they  re- 
cently appeared  in  the  leading  papers  of  Texas  and  of 
the  Southwest.  In  the  preparation  of  these  articles  I 
have  carefully  examined  hundreds  of  legal  documents, 
and  have  read  millions  of  words  of  testimony.  It  was  in- 
evitable that  I should  make  a few  minor  mistakes  in 
the  original  presentation  of  the  history  of  this  case, 
but  none  of  my  critics  has  called  my  attention  to  any 
basic  errors,  and  in  the  present  revision  I have  made 
such  corrections  as  have  been  noted  by  the  close  students 
of  this  remarkable  case. 

Whatever  of  public  sentiment  exists  against  the 
Waters  Pierce  Oil  company  has  been  stimulated  by  the 
constant  reiteration  of  the  charges  above  enumerated. 
Many  citizens  have  believed  these  charges,  and  the  facts 
to  the  contrary  have  not  until  now  been  presented  to 
them  in  connected  detail.  I am  sure  that  no  man  in 
Texas  asks  that  the  Waters  Pierce  or  any  other  trading 
corporation  shall  be  punished  or  discriminated  against  on 
account  of  manufactured  charges  or  of  mistaken  impres- 
sions. 

The  case  for  or  against  the  Waters  Pierce  Oil  com- 
pany rests  largely  on  the  truth  or  falsity  contained  in  the 
specific  counts  I have  enumerated.  I shall  leave  it  to 
the  reader  to  determine  whether  or  not  I have  demolished 
the  edifice  of  fabrication  which  has  so  sedulously  been 
reared,  and  I shall  leave  it  to  the  people  of  Texas  and  of 
the  Southwest  to  judge  of  the  motives  of  those  who  have 
pushed  themselves  to  the  front  by  giving  circulation  to 
accusations  which  are  in  direct  conflict  with  the  officially 
recorded  facts  and  evidence,  to  which  you  are  cited  in  the 
chapters  which  follow. 


(Tbaptcr  ll. 

A REMARKABLE  CRUSADE 


The  story  of  the  crusade  against  the  Waters  Pierce  Oil  com- 
pany would  have  delighted  Balzac.  That  master  of  narrative 
detail  would  have  gleaned  gems  from  every  page  of  its  reeord, 
but  he  would  have  been  dazed  by  the  money  unit  necessary  to 
its  telling.  The  great  French  novelist  reveled  in  the  franc 
mark,  and  his  chapters  are  filled  with  figures  calculated  to  ex- 
press the  affluence  of  the  magnates  whose  schemings,  triumphs 
or  downfalls  he  fervidly  depicts,  but  he  lived  in  an  age  when  the 
imagination  was  not  called  on  for  any  individual  wealth  exceed- 
ing a million  of  dollars.  The  combined  possessions  of  all  of  his 


characters  would  not  total  a typical  modern  fortune,  and  not 
one  of  them  ^massed  from  a lifetime  of  cunning  an  amount 
equal  to  that  which  Rockefeller  now  receives  in  monthly 
dividends. 

Therefore  Balzac’s  wildest  financial  plots  seem  petty  to 
what  has  happened  and  is  happening  to  the  Waters  Pierce  Oil 
company.  His  readers  would  have  scoffed  had  he  pictured  an 
oil  magnate  worth  5,000,000,000  francs.  This  was  a thousand 
times  what  then  was  probable.  They  would  have  laughed  had 
he  depicted  a court  scene  in  which  a jury  brought  in  a verdict 


—6— 


of  8,000,000  francs  against  a law-defying  corporation.  They 
could  no  more  comprehend  such  figures  than  they  could  have 
comprehended  Texas.  The  truth  of  the  matter  ;s  that  we  do  not 
comprehend  such  figures,  neither  do  we  justly  appreciate  the 
importance  of  the  gigantic  movements  in  which  the  Waters 
Pierce  Oil  company  has  played  so  conspicuous  a part. 

Most  of  us  fail  to  view  this  controversy  from  a proper  per- 
spective point.  Our  ears  have  been  filled  with  the  din  produced 
by  warring  politicians,  and  we  have  paid  more  heed  to  their  per- 
sonal ambitions  and  to  purely  partisan  advantages  than  we 
have  to  issues  which  concern  not  only  every  citizen  of  Texas, 
but  which  are  of  direct  interest  to  the  dwellers  in  every  section 
of  the  United  States.  I hold,  and  shall  attempt  to  show,  that 
the  questions  raised  through  the  prosecution  of  the  M'aters 
Pierce  Oil  compay  are  more  vital  than  any  which  have  arisen 
since  the  civil  war.  If  the  people  of  Texas  succeed  in  wiping  out 
the  trust  system  of  industry  and  in  replacing  it  with  something 
new  and  better,  than  every  incident  in  the  career  of  Henry  Clay 
Pierce  will  become  invested  with  significance  and  historical 
interest. 

A PERSONAL  WORD 

Those  who  are  familiar  with  my  writings  will  not  charge 
that  I hold  a brief  for  trusts.  For  nearly  twenty  years  my 
work  has  been  devoted  largely  to  a consideration  of  those  eco- 
nomic questions  which  have  arisen  from  the  monopolization  of 
industry,  commerce  and  money.  I penned  the  prediction  of 
the  present  supremacy  of  trusts  and  banks  at  a time  when  it 
was  the  common  belief  that  no  possible  chain  of  events  could 
dethrone  King  Competition.  This  prediction  was  not  original 
with  me,  but  it  is  nearly  a generation  ago  that  I pinned  my 
faith  to  the  tenets  of  that  economic  school  which  held  that 
evolutionary  causes  had  decreed  the  death  of  private  competition, 
and  which  outlined  with  accuracy  the  conditions  which  now 
prevail. 

The  shad  swims  up  the  river  in  spring  not  because  some 
spectacled  naturalist  has  written  a book  explaining  why  he  does 
so.  The  men  who  formed  the  first  trust  did  not  take  their  cue 
from  those  German  thinkers  who  were  the  first  to  foresee  that 
the  machine  was  destined  to  revolutionize  the  industrial  system 
of  the  world.  Both  the  shad  and  the  business  man  act  on  instinct, 
and  instinct  is  simply  an  unthinking  impulse  to  obey  some  natural 
law. 

The  point  I wish  to  make  is  this:  Trusts  do  not  originate 
because  of  some  deep-laid  conspiracy;  neither  do  they  result 
from  the  exercise  of  rare  individual  judgment  and  keen  capital- 
istic insight.  The  impulse  which  drove  business  men  to  the  pro- 
tection of  a trust  is  exactly  the  same  instinct  which  causes  a 
prudent  man  to  seek  shelter  when  it  rains,  or  which  inclines  a 
Kansas  farmer  to  crawl  into  his  dugout  when  a tornado  heads 
his  way.  The  trust  was  the  first  remedy  at  hand  for  that  per^ 
petual  panic  called  “unrestricted  competition.” 

THE  “GOOD  OLD  DAYS”  OF  COMPETITION 

No  question  of  morals  or  of  right  or  wrong  was  involved 
when  competition  merged  into  combination.  Business  men 
were  not  saints  when  they  were  fighting  one  another;  there 
were  no  halos  over  their  heads  when  they  were  cutting  prices, 
reducing  wages  and  were  clinched  in  a life  and  death  struggle 
to  determine  which  was  the  fittest  to  survive.  By  the  same  token 
they  did  not  become  criminals  when  they  declared  peace  and 
combined  their  forces.  Whether  or  not  there  shall  be  trusts 
is  purely  an  economic  question.  The  essential  difference  be- 
tween the  old  competitive  system  and  the  trust  one  which  has 
supplanted  it  is  this:  Under  competition  an  individual  or  a 

corporation  did  not  dare  treat  the  public  or  the  wage-earners 
fairly — business  ruin  was  the  penalty  of  decency  or  mercy. 
Under  the  present  trust  system  of  industry  and  finance  those  in 
power  can  thrive  and  at  the  same  time  treat  all  concerned  with 
fairness — but  they  prefer  not  to.  They  lack  the  sagacity  to^ 
maintain  a benevolent  despotism;  they  are  too  short-sighted 
to  temper  their  greed  with  diplomacy. 

— 7. 


The  public,  w;hich  was  flayed,  bruised,  robbed  and  half- 
starved  under  the  cut-throat  competitive  era  which  prevailed 
twenty-five  years  ago,  is  unable  to  see  any  remedy  for  the  abuses 
of  the  trust  system  except  to  return  to  that  industrial  anarchy 
from  which  the  trust  evoluted.  I wish  frankly  to  state  my  posi- 
tion in  this  matter  and  to  advance  a remedy. 

Competition  cannot  be  maintained  or  forced  where  combi- 
nation is  possible.  It  seems  well  established  that  there  are 
certain  industries  and  services  which  can  best  be  conducted 
under  a general  system  of  production  and  distribution,  in  otlier 
words,  which  naturally  lend  themselves  to  monopolization. 
These  are  few  in  number,  and  invariably  are  the  absolute  ne- 
cessities of  existence.  The  vast  majority  of  industries  and  ser- 
vices are  still  under  control  of  individuals  and  competing  con- 
cerns. I hold  that  so  long  as  competition  prevails  in  any  in- 
dustry or  service  that  the  State  should  encourage  such  com- 
petition by  all  possible  means.  On  the  contrary,  I hold  that 
whenever  a combination  of  individuals  or  of  corporations  suc- 
ceeds in  throttling  competition  that  its  very  success  has  de- 
creed that  it  can  best  be  conducted  as  a monopoly,  but  I also 
hold  that  the  State,  the  government  or  the  people — call  it  which 
you  please — should  then  step  in  and  acquire  and  conduct  such 
a monopoly. 

THE  IM)USTRIAL  DOG  FIGHT 

This  theory  is  in  direct  conflict  with  one  which  has  been 
more  popular,  namely,  that  it  is  the  prime  duty  of  a State  to 
keep  its  citizens  in  a perpetual  competitive  struggle.  Most 
of  our  statesmen  hold  firmly  to  the  belief  that  the  State  should 
act  as  referee  in  an  industrial  dog  fight,  and  that  it  should 
interfere  only  at  times  when  one  dog  has  a deadly  hold  on  his 
bloody  and  still  savage  opponent;  that  it  should  pull  these 
mongrels  apart,  hold  the  stronger  one  aside  until  the  weaker 
has  recovered  his  breath,  and  that  it  should  then  set  them  at 
each  other  in  an  endless  chewing  match.  If  these  industrial 
dogs  attempt  to  patch  up  a peace  it  becomes  the  duty  of  the  State 
to  send  them  to  the  pound,  and  to  whistle  up  another  batch 
of  canines  and  toss  them  into  the  competitive  ring — all  of  which 
is  supposed  to  conduce  to  strenuous  and  lasting  prosperity. 

To  abandon  this  rather  grim  simile,  I will  repeat  that  I 
hold  to  the  theory  that  whenever  monopoly  naturally  evolutes 
from  competition  the  government  should  become  the  monopolist. 

I stand  for  the  public  schools  against  a university  fostered 
and  dominated  by  a Rockefeller;  I hold  that  the  United  States 
post-office  is  more  worthy  of  admiration  and  more  conducive 
to  patriotism  than  the  United  States  Express  company,  and, 
since  it  is  inevitable  that  we  shall  have  only  one  railroad  system 
I prefer  that  it  shall  be  owned  and  operated  by  the  people 
through  their  government  rather  than  by  a Harriman  and  a 
syndicate  of  speculative  Wall  street  banks. 

But  we  are  not  yet  ready  as  a people  to  install  public  owner- 
ship in  those  great  functions  and  industries  which  seem  naturally 
adapted  for  monopolization.  We  are  content  to  watch  Great 
Britain,  Europe,  Australia,  New  Zealand  and  other  govern- 
ments make  these  great  initial  experiments. 

WHAT  HAPPENED  IN  FORMER  PANICS. 

I wish  to  call  the  attention  of  those  readers  who  honestly 
believe  that  the  way  to  go  about  this  problem  is  to  “smash  the 
trusts,”  to  a little  matter  of  history  which  may  have  escaped 
their  attention.  Those  who  are  old  enough  to  remember  what 
happened  in  1873  will  better  ai>preciate  the  force  of  my  com- 
parison than  those  who  read  of  its  horrors  in  books,  or  listen 
to  the  accounts  as  narrated  by  their  elders. 

There  were  no  trusts  in  1873.  It  was  in  that  delightful 
era  when  each  merchant  and  manufacturer  was  engaged  in  the 
great  moral  task  of  attempting  to  ruin  by  comjjetition  each 
and  all  persons  and  concerns  in  the  same  line  of  business.  No 
man  knew  how  much  his  competitor  had  produced;  no  concern 
had  the  slightest  idea  of  the  demands  of  the  consumer,  and 
thus  each  and  all  went  blindly  on,  manufacturing  or  buying 


/ 


an  indefinite  quantity  of  products  for  an  indefinite  and  un- 
known demand — until  finally  the  crash  came. 

It  was  not  the  kind  of  a panic  we  have  recently  witnessed. 
It  was  not  made  to  order  in  Wall  street — as  some  suspect  that 
this  one  originated — it  was  caused  solely  and  entirely  by  over- 
production in  consequence  of  an  absolutely  unorganized,  un- 
scientific and  senseless  system  of  individualistic  and  anarch- 
istic competition — and  one  which  the  present  generation  can 
return  thanks  that  is  dead  beyond  the  power  of  unthinking 
demagogues  to  resurrect. 

Have  you  paused  to  reflect  that  in  the  present  panic  not 
a single  great  industry  has  suspended  operation?  True,  many 
of  them  have  curtailed  production,  but  it  has  been  done  in  an 
orderly  manner,  and  the  great  mass  of  the  workers  have  retained 
their  places.  Hundreds  of  factories  have  already  resumed 
with  full  forces.  I have  not  heard  of  a single  great  industrial 
failure.  The  thousands  upon  thousands  of  vast  manufacturing 
plants  are  intact,  and  ready  to  do  the  work  for  which  they  were 
created.  Why  has  this  happened?  Because  of  the  substitution 
of  organized  for  unorganized  industry.  Because  we  have  learned 
some  industrial  sense.  Because  we  have  emerged  away  from 
industrial  barbarism,  and  because  we  have  taken  at  least  one 
long  step  in  advance — a step  from  which  we  will  never  recede. 

What  happened  in  1873  when  competitive  over-production 
precipitated  a panic?  Read  the  record,  if  you  did  not  witness 
and  suffer  by  it.  Industry  was  paralyzed.  Thousands  upon 
thousands  of  factories  closed  because  of  absolute  bankruptcy. 
Hundreds  upon  hundreds  of  banks  failed ; hundreds  of  thousands 
of  men  and  women  lost  the  last  dollar  they  had  on  earth.  Not 
for  a few  months  did  this  awful  state  of  affairs  exist,  but  for  more 
than  two  years  the  ciirse  of  this  devastating  panic  rested  on 
the  country,  and  it  was  six  or  seven  years  before  the  nation 
staggered  out  from  under  its  blighting  effect. 

Competition?  Do  you  wonder  that  men  hesitated  to  en- 
gage again  in  such  an  idiotic  contest?  Do  you  wonder  that 
intelligent  men  sought  some  refuge  from  a state  of  alleged 
civilization  in  which  every  invention,  every  newly  installed 
machine,  every  new  scientific  discovery,  made  inevitable  the 
day  when  black  panic  should  bring  down  the  whole  edifice  of 
industry,  burying  the  good  and  the  bad  in  its  ruin?  I tell  you 
that  the  trust  was  not  born  of  a conspiracy;  it  was  forced  on 
the  nation  as  the  sole  alternative  of  inevitable  recurrent  disas- 
ters due  to  panics  bred  by  unrestrained  and  unregulated  com- 
petition. 

And  this  is  the  “system”  which  some  of  our  good  friends 
would  install  after  having  smashed  the  trusts.  My  dear  sir, 
if  you  live  until  the  name  of  George  Washington  is  forgotten 
you  will  not  see  the  fruition  of  your  desire.  This  nation  is  headed 
in  another  direction.  It  is  about  to  learn  some  method  by  which 
it  can  preserve  the  good  features  which  the  trusts  have  taught 
us,  and  it  will  find  a way  to  discard  the  bad  features  which 
are  inevitable  during  the  process  of  development,  but  it  will 
“smash”  nothing,  except  those  who  persist  in  getting  in  the 
way  of  the  wheels  of  economic  progress. 

A iEW  SIMPLE  QUESTIONS. 

Let  me  venture  timidly  to  ask  if  selection  has  yet  been 
made  of  those  honest  and  law-abiding  gentlemen  who  are  to 
be  intrusted  with  the  task  of  rehabilitating  competition  in  oil 
in  Texas  and  elsewhere?  Who  is  to  determine  if  they  are  com- 
peting as  hard  as  they  can?  If  one  of  these  competitors  is  wiped 
out  in  the  struggle — and  many  of  them  will  be  if  the  competition 
be  on  the  square — will  it  be  permitted  for  the  victorious  sur- 
vivor to  acquire  the  wreck  of  the  victim  or  victims?  What 


former  model  of  competition  are  these  rival  concerns  to  pattern 
after?  How  large  a percentage  of  oil  will  any  one  of  these 
resurrected  individualists  be  permitted  to  produce,  buy  or  sell 
before  the  State  of  Texas  brands  him  a trust  and  by  fines  and 
other  penalties  confiscates  his  business?  What  shall  a competi- 
tor do  to  be  saved  when  he  finds  that  he  is  so  successful  that 
he  is  nearing  the  danger  line?  What  shall  be  the  minimum 
of  competing  concerns,  and  how  shall  it  be  maintained? 

These  are  not  sarcastic  questions.  They  are  perfectly 
practical  ones,  and  those  who  think  that  the  destruction  of  a 
private  monopoly  will  be  followed  by  free  private  competition 
must  have  answers  for  the  above  questions  and  a hundred  more. 
I would  rather  defend  and  champion  a currency  system  based 
on  acorns  and  three-leaved  clovers  than  to  explain  how  a great 
trust  is  to  disintegrate  into  a thousand  small  establishments 
between  which  there  shall  be  that  beatific  warring  concord 
by  which  the  public  will  get  the  best  of  it. 

Considered  from  a broad  viewpoint,  the  story  of  the  Waters 
Pierce  Oil  company  and  of  the  business  career  of  Henry  Clay 
Pierce  should  throw  light  on  some  great  problems  now  confront- 
ing us.  It  is  a story  filled  with  incidents  and  events  which 
have  significance  to  the  student  of  social  economy.  It  begins 
at  a time  when  few  dreamed  that  private  effort  could  throttle 
competition,  and  it  spans  the  most  wonderful  industrial  era 
in  all  recorded  history.  The  foremost  generals  of  financial 
strategy  figure  in  its  pages,  and  in  its  chapters  we  catch  glimpses 
of  statesmen,  politicians,  judges,  heroes,  villains  and  other 
types  whose  connections  with  the  Waters  Pierce  company 
have  made  its  name  familiar  wherever  the  English  language 
is  spoken.  It  is  a wonderful  story,  one  to  which  I am  unable 
to  do  justice,  but  I shall  not  make  the  mistake  of  assuming 
that  all  of  these  momentous  events  were  foreordained  in  order 
that  certain  politicians  should  be  able  to  elimb  over  the  heads 
of  other  politicians  to  unmerited  preferment. 

PURPOSE  OF  THIS  HISTORY. 

No  connected  narrative  of  the  Waters  Pierce  has  ever  been 
written.  It  has  been  told  in  fragments,  and  each  succeeding 
event  or  disclosure  has  been  the  signal  for  a fresh  chorus  of 
invective  and  recrimination,  charges  and  counter  charges,  and 
has  been  attended  by  frantic  efforts  of  petty  demagogues  to 
gain  position  or  advantage  by  attaching  themselves  to  one 
faction  or  the  other.  Every  detail  has  been  distorted,  mag- 
nified or  misrepresented.  In  the  resultant  clamor  the  reading 
and  thinking  public  has  lost  sight  of  or  has  forgotten  the 
essential  facts  of  this  remarkable  case.  Bombast  has  taken 
the  place  of  argument,  and  a thousand  appeals  have  been 
made  to  passion  and  none  to  reason. 

It  is  my  purpose  calmly  to  review  this  case.  There  seems 
to  be  something  about  the  oil  industry  which  arouses  the  unfair 
and  vindictive  in  all  concerned  in  it,  and  many  of  its  historians 
have  not  escaped  this  infection.  In  the  chapters  which  follow 
I shall  attempt  to  stick  close  to  the  facts.  I shall  not  paint 
Henry  Clay  Pierce  either  as  a saint  or  devil,  but  shall  narrate 
his  most  interesting  and  instructive  business  career  as  the 
records  reveal  it.  I shall  tell  the  story  of  the  rise  of  the  Waters 
Pierce  Oil  company  from  its  humble  beginning,  and  shall  detail 
the  successive  steps  by  which  it  became  affiliated  with  the 
greatest  of  all  the  trusts. 

I believe  that  a consecutive  account  of  its  doings  and  of 
its  complications  will  enable  the  reader  better  to  comprehend 
the  significance  of  the  events  which  have  clustered  about  it, 
and  I hope  that  I may  suggest  certain  things  which  will  lead 
to  constructive  thought  and  action. 


Chapter  III. 

HOW  HENRY  CLAY  PIERCE  MADE  HIS  STAR'!' 


Instead  of  starting  at  the  beginning — as  all  conventional 
historians  do — I prefer  to  imitate  those  curoius  young  women 
who  turn  to  the  last  page  of  a novel  to  learn  in  advance  just 
what  happened  to  the  hero  and  heroine.  Before  tracing  the 
early  history  of  the  Waters  Pierce  Oil  company  and  its  central 
figure,  let  us  glance  at  the  record  of  what  has  happened  to  it. 

Its  present  situation  is  without  parallel  in  the  industrial 
and  legal  history  of  the  United  States  or  of  any  other  country. 
This  situation  has  been  brought  about  by  legislative  and  court 
actions  which  have  no  precedents,  and  it  is  this  that  invests  this 
story  with  its  chief  interest. 

Here  is  a great  corporation  which  has  operated  for  a gener- 
ation in  the  territory  covering  more  square  miles  than  all  of 
Europe.  It  has  employed  an  army  of  men;  it  has  handled  hun- 
dreds of  millions  of  dollars  worth  of  merchandise;  it  has  steadily 
increased  its  trade  and  its  power;  and  yet,  in  the  hour  of  its 
highest  prosperity,  it  has  been  legally  destroyed  in  the  State  , 
of  Texas.  Fines  so  large  that  they  may  be  deemed  confiscatory' 
have  been  assessed  against  it;  its  enormous  and  profitable  busi- 
ness has  become  the  bone  of  contention  in  conflicting  courts; 
its  earnings  are  being  held  by  the  authorities  as  additional  se- 
curity for  fines  levied  or  which  may  yet  be  imposed  upon  it; 
powerful  rivals,  whose  identity  is  unknown  or  vaguely  con- 
jectured, are  reaching  out  for  its  trade,  its  chief  executive  is  ac- 
cused of  a statutory  crime,  and  is  resisting  extradition  to  Texas 
on  the  plea  that  selfish  partisans  have  so  distorted  the  facts 
that  he  is  denied  a fair  chance  before  a jury  in  the  Lone  Star 
State;  and  for  nearly  a year  the  people  of  a great  commonwealth 
have  had  their  passions  appealed  to  by  the  leaders  of  warring 
factions,  and  have  been  compelled  to  listen  to  a controversy  in 
which  neither  side  has  halted  at  unbridled  invectives  and  direct 
misrepresen  tation . 

Surely  the  Waters  Pierce  Oil  company  must  have  committed 
some  stupendous  crime  in  order  to  have  brought  this  piled-up 
calamity  upon  itself?  The  mere  fact  that  it  is  accused  of  trust 
practices  cannot  warrant  the  penalties  which  have  been  inflicted 
against  this  corporation.  There  is  no  question  that  the  oi]J 
industry  of  the  United  States  is  controlled  by  a trust,  and  that 
this  trust  is  known  as  the  Standard  Oil  company.  There  is 
no  dispute  over  the  fact  that  the  Standard  Oil  company  now 
owns,  and  long  has  owned,  a controlling  portion  of  the  stock 
of  the  Waters  Pierce  Oil  company. 

This  is  a matter  of  court  record,  but  this  fact  does  not  ex- 
plain why  so  crushing  a series  of  blows  has  fallen  on  the  subject 
of  this  inquiry. 

THERE  ARE  OTHER  TRUSTS. 

Oil  is  not  the  sole  commodity  or  industry  w'hich  has  passed 
under  trust  control  in  the  United  States.  Such  vast  industries 
as  copper,  sugar,  leather,  paper,  rubber,  steel,  dressed  meats,  to- 
bacco, anthracite  coal,  matches,  harvesting  machinery,  watches 
and  a score  of  other  products  are  monopolized  to  an  ex- 
tent approximating  that  of  oil,  and  in  many  instances  their 
magnates  surpass  in  rapacity  those  at  the  head  of  the  Standard 
Oil  company.  These  trusts  levy  tribute  on  the  consumers 
of  Texas;  there  is  no  manner  of  doubt  that  they  are  ‘‘combina- 
tions in  restraint  of  trade;”  they  operate  through  subsidiary 
compianies  so  thinly  masked  that  the  dullest  of  prosecuting 
officials  cannot  escape  the  fact  of  the  conspiracies,  and  yet 
they  have  escaped  punishment  or  even  attempted  punishment. 
Their  exactions  are  responsible  for  the  outrageous  scale  of  high 
prices  which  has  helped  to  bring  about  the  present  trade  re- 
action, and  with  brutal  insolence  they  are  bent  on  maintaining 
these  prices  in  the  face  of  lessened  consumption. 

If  Texas  justice  has  held  the  scales  evenly  she  has  assumed 
that  the  sins  of  the  Waters  Pierce  are  scarlet  compared  with 


the  known  trusts  which  have  been  exempted  from  prosecution. 
The  constitution  of  Texas  makes  no  distinction  between  “good” 
and  ‘‘bad”  trusts,  but  there  is  not  a paper  printed  in  the  State 
which  does  not  pay  tribute  to  the  paper  trust  every  time  the 
publication  comes  from  the  presses.  How  does  this  happen? 
Must  the  public  be  aroused  to  a frenzy  before  justice  lays  hands 
on  the  lawless  corporation? 

And,  finally,  what  was  the  series  of  crimes  committed  by 
the  Waters  Pierce  Oil  company,  for  which  it  has  been  branded 
the  one  felon  among  Texas  trusts?  Why  has  it  been  sentenced 
to  death  while  know'n  monopolies  are  permitted  to  collect 
unchallenged  tribute  from  a helpless  people?  Is  it  a sin  to 
exact  an  unfair  profit  from  oil,  and  a virtue  to  charge  two  prices 
for  beef?  Is  it  criminal  to  consolidate  oil  companies,  and  patri- 
otic to  merge  banks  or  railroad  companies?  Shall  we  send  a 
successful  oil  magnate  to  jail  and  a successful  steel  magnate 
to  the  senate?  Shall  w'e  anathematize  the  man  who  made 
millions  by  consolidating  oil  refineries  and  pipe  lines,  and  listen 
with  pleased  aw'e  to  the  words  of  advice  and  wisdom  which  flow 
from  the  lips  of  the  man  wffio  consolidated  thousands  of  miles 
of  railways  and  has  lured  the  public  to  buy  tons  of  worthless 
stocks  and  bonds?  Shall  we  sneer  at  the  benefactions  of  a 
Rockefeller  who  made  his  millions  by  plundering  the  people 
through  his  mastery  of  the  oil  industry,  and  laud  the  charity 
of  a Carnegie  who  has  accumulated  hundreds  of  millions  through 
his  mastery  of  the  steel  industry? 

I take  it  that  most  men  desire  to  be  fair  in  answering  these 
questions.  I take  it  that  the  people  of  Texas  and  of  the  South- 
west are  more  anxious  to  win  their  industrial  independence 
than  they  are  to  wreak  vengeance  on  an  isolated  corporation 
or  an  individual.  With  which  preface  I wall  start  at  the  begin- 
ning and  trace  the  record  of  the  Waters  Pierce  Oil  company 
and  the  career  of  Henry  Clay  Pierce.  If  any  errors  appear  in 
this  narrative  they  will  pertain  to  trifles.  There  is  no  dispute 
concerning  the  basic  facts,  but  until  now  there  has  been  no  at- 
tempt made  to  arrange  them  in  sequence,_  so  that  the  student  of 
this  most  remarkable  case  may  arrive  at  a clear  understanding 
of  the  issues  involved. 

BOYHOOD  OF  HENRY  CLAY  PIERCE. 

Henry  Clay  pierce  was  born  in  Watertown,  New  York 
State,  fifty-six  years  ago.  His  father  was  a physician  with  an 
unprofitable  village  practice.  The  boy  went  to  public  school 
until  he  was  about  14  years  old.  A college  education  was  out 
of  the  question,  but  the  boy  had  stuff  in  him  which  did  not 
require  the  coddling  of  a long  curriculum.  Perhaps  I am 
wrong,  but  it  seems  to  me  that  the  average  youngster  of  today 
does  not  have  the  chance  to  rise  that  was  offered  fifty  years  ago. 
Perhaps  it  would  be  more  accurate  to  say  that  the  boy  of  today 
has  too  many  chances,  and  that  he  is  permitted  to  choose  the 
wrong  ones.  Young  Pierce  had  no  opportunity  to  read  the 
pages  of  scandals,  flippant  gossip  of  the  degenerate  rich,  trashy 
stories  and  other  ephemeral  truck  with  which  our  press  and 
periodicals  are  filled,  hence  he  spent  the  long  winter  evenings 
devouring  Dickens,  Thackeray,  Shakespeare,  Longfellow,  Gibbon, 
Hume,  Froude  and  other  immortal  writers  whose  books  now 
lie  dusty  and  untouched  on  the  shelves  of  Carnegie  libraries, 
which  institutions  serve  to  meet  the  popular  demand  for  the  mor- 
bid and  too  often  debasing  ‘‘litemture”  ground  out  by  the 
modern  school  of  the  ‘‘six  best  sellers.” 

The  tales  of  the  dawning  greatness  and  majesty  of  the  M'est 
and  the  Southwest  fascinated  young  Pierce.  Like  many  another 
lad  in  the  grim  period  of  the  civil  war  he  pleaded  with  his  parents 
to  be  permitted  to  become  a drummer-boy,  but  fate  did  not 
grant  this  ambition.  Shortly  after  the  close  of  the  war,  when 
Pierce  was  14  years  old,  a relative  decided  t(>  move  to  St.  Louis, 


—9— 


and  after  many  family  conferences  and  much  persuasion  it 
was  agreed  that  the  boy  should  make  the  trip  and  cast  his  for- 
tunes in  the  wonderful  land  west  of  the  Mississippi. 

HE  ARRIVES  IN  ST.  LOUIS. 

He  arrived  there  at  a time  when  St.  Louis  and  other  cities 
were  thronged  with  soldiers  who  had  returned  from  Southern 
battle-fields.  There  were  two  applicants  for  every  position, 
but  the  boy  did  not  ask  for  much,  and  so  it  happened  that  a 
place  was  secured  for  him  in  a bank.  His  first  duties  were 
those  of  messenger,  but  he  soon  was  promoted  to  the  more 
exalted  position  of  clerk,  and  at  the  age  of  17  became  cashier 
of  the  institution.  Those  who  have  been  led  to  believe  that 
Henry  Clay  Pierce  has  risen  to  financial  and  industrial  great- 
ness by  the  grace  of  John  D.  Rockefeller  must  admit  that  he 
made  a fairly  promising  start  to  become  the  cashier  of  a 
bank  at  the  age  of  17.  Most  modern  boys  of  17  know  more 
about  base-ball  percentages  and  the  weight  of  foot-ball  heroes 
than  they  do  of  sight  drafts,  negotiable  securities  and  of  foreign 
exchange.  They  are  planning  to  enter  college  or  to  live  on  their 
dads  rather  than  to  build  up  a great  industry  in  an  unsettled 
territory,  which  already  yas  the  fixed  ambition  of  Henry  Clay 
Pierce. 

Long  before  that  time  that  busy  hussy.  Fate,  had  been 
planning  the  triumphs  and  troubles  of  all  of  us,  including  those 
of  Henry  Clay  Pierce.  Fate’s  satellites.  Luck,  Chance  and 
Opportunity,  had  selected  the  men  and  the  women,  had  arranged 
the  meetings,  happenings  and  the  crises,  and  had  set  aside  the 
broad  field  of  his  activities.  It  was  decreed  three-quarters  of  a 
century  ago  that  a man  named  John  Robert  Finlay  should  be- 
come a manufacturer  of  “coal  oil’’  from  shale  in  Glasgow, 
Scotland.  In  the  course  of  events  this  shrewd  and  far-sighted 
Scotchman  left  his  native  country  and  came  to  America,  finally 
settling  in  St.  Louis.  Finlay  discovered  in  Kentucky  a kind  of 
shale  which  was  similar  to  that  which  lay  in  the  hills  to  the  north 
of  Glasgow,  and  from  this  he  extracted  with  much  difficulty 
and  small  profits  the  ignitable  fluid  which  he  conveyed  by 
barges  to  St.  Louis  and  sold  in  competition  with  candles 
and  the  miserable  gas  then  produced.  He  was  thus  engaged 
at  the  time  Henry  Clay  Pierce  was  born,  and  when  John  D. 
Rockefeller  was  toddling  to  school  in  the  little  New  York  village 
of  Owego.  Finlay  had  no  competitor  in  St.  Louis;  his  enter- 
prise, in  fact,  was  so  modest  and  unique  that  only  his  few  cus- 
tomers and  acquaintances  knew  that  it  had  an  existence. 

THE  DISCOVERT  OF  OIL. 

It  was  not  until  February  1,  1860,  that  E.  L.  Drake'struck 
oil  from  the  first  well  ever  sunk  in  the  United  States  for  that 
purpose.  “Drake’s  Folly,’’  as  it  was  known  to  the  few  scoffers 
aware  of  that  enterprise,  was  located  near  Titusville,  Pa.  Prior 
to  that  time  petroleum  had  been  used  only  for  medicinal  purposes, 
and  great  virtues  were  ascribed  by  those  who  skimmed  it  from 
the  surface  of  “Oil  creek”  in  Northwestern  Pennsylvania,  and 
from  the  greasy  flood  of  the  Kanawha,  in  West  Virginia.  It 
was  first  sold  as  “Seneca  Oil,”  and  its  vendors  pretended  that 
they  had  obtained  the  secret  of  its  preparation  from  some 
Indian  chief.  In  the  middle  of  the  century  Samuel  M.  Kier 
went  into  the  business  on  a larger  scale.  This  gentleman  owned 
salt  wells  in  Tarentum,  not  far  from  Pittsburg,  and  quantities 
of  oil  came  up  with  the  salt  water.  Mr.  Kier  believed  that  this 
oil  had  curative  properties,  and  began  to  extract  and  bottle  it. 
In  the  years  between  1850  and  1861,  “Kier’s  Petroleum,  or 
Rock  Oil,”  was  sold  in  most  drug  stores.  It  was  advertised 
as  a liniment,  but  was  recommended  for  cholera  morbus,  liver 
complaint,  bronchitis  and  consumption,  and  the  prescribed 
dose  was  three  teaspoonfuls  three  times  a day. 

Mr.  Kier  was  the  first  one  to  discover  that  petroleum 
was  also  a lubricator  and  a luminant,  and  years  before  John  D. 
Rockefeller  invested  a dollar  in  the  oil  business  the  experiments 
had  been  made  which  disclosed  many  of  the  commercial  proper- 
ties of  this  natural  product. 

When  Drake  drilled  his  first  well  and  struck  a flow  of  oil 
equalling  twenty-five  barrels  a day,  petroleum  was  selling  at 


$18  a barrel.  There  was  a rush  for  the  oil  fields,  wells  were  struck 
which  flowed  2000,  3000  and  4000  barrels  a day,  and  at  the 
close  of  1861  oil  was  selling  at  10  cents  a barrel  at  the  wells. 
Rockefeller  had  not  yet  dawned  on  the  oil  horizon.  He  was 
in  the  grocery  and  commission  business  in  Cleveland. 

FOUNDATION  OF  A GREAT  CORPORATION. 

Shortly  after  oil  was  struck  in  Pennsylvania  there  were 
wells  sunk  along  the  Kanawha  in  West  Virginia,  and  petroleum 
in  large  quantities  was  discovered.  John  Robert  Finlay  of 
St.  Louis  was  not  slow  in  deciding  that  his  Scotch  process  of 
extracting  oil  from  shale  was  obsolete.  He  journeyed  to  Pennsyl- 
vania and  West  Virginia  and  looked  over  the  ground,  and  began 
operations  to  supply  the  Southwest  with  oil.  This  was  fully  a 
year  before  Samuel  Andrews  persuaded  John  D.  Rockefeller 
that  there  was  more  money  in  the  oil  business  than  in  furnishing 
the  government  with  army  supplies. 

Mr.  Finlay  knew  that  it  was  impossible  at  that  time  to 
ship  oil  from  the  wells  to  St.  Louis  by  rail.  The  tank  car  was 
not  then  dreamed  of,  and  rates  were  so  high  that  the  use  of 
ordinary  cars  was  out  of  the  question.  In  the  meanwhile  he 
had  successfully  sunk  wells  along  the  Little  Kanawha.  He 
built  wooden  barges,  loaded  them  with  his  oil  and  that  purchased 
from  other  producers,  towed  them  to  Parkersburg,  thence  down 
the  Ohio  River  to  Cairo  and  up  the  Mississippi  to  St.  Louis. 
It  was  a proud  day  for  Mr.  Finlay  when  his  first  string  of  oil 
barges  was  anchored  at  the  levee,  and  it  was  an  event  in  the 
history  of  St.  Louis.  The  oil  was  drawn  from  the  barges  by 
hand  pumps  into  stout  wooden  barrels,  and  hauled  to  his  re- 
finery west  of  the  then  city  limits  of  St.  Louis.  On  the  long 
journey  down  the  rivers  much  of  the  oil  had  been  lost  by  evapo- 
ration, but  the  venture  was  a financial  success,  Mr.  Finlay 
having  no  difficulty  in  selling  his  oil  at  a dollar  or  more  a gallon, 
fully  eight  times  the  price  which  obtains  to-day. 

This  enterprising  Scotchman  gradually  enlarged  the  scope 
of  his  operations  and  had  comparatively  little  competition, 
but  he  failed  to  realize  or  grasp  the  opportunity  which  was 
offered  to  him.  He  was  content  to  sell  the  products  of  his 
little  refinery  to  the  people  of  St.  Louis,  and  he  lacked  the  energy 
to  push  out  into  the  vast  territory  naturally  tributary  to  that 
city.  Not  so  with  the  youthful  cashier  of  the  St.  Louis  bank. 
The  boy,  Henry  Clay  Pierce,  saw  the  possibilities  in  oil.  After 
his  work  was  over  he  read  all  that  was  to  be  had  concerning 
the  stupendous  movements  then  in  progress  in  the  Pennsyl- 
vania and  Ohio  oil  fields.  Wealthy  operators  were  struggling 
for  the  mastery  of  the  trade  in  the  East  and  middle  West.  The 
wonderful  brain  and  relentless  energy  of  Rockefeller  had  begun 
to  make  an  impress,  and  the  pages  of  the  newspapers  were  filled 
with  tales  of  fortunes  won  and  lost  in  that  section  where  the 
earth  spouted  wealth. 

LOOKING  INTO  THE  FUTURE. 

Young  Pierce  believed  it  possible  to  build  up  an  oil  trade 
which  would  command  the  patronage  of  the  empire  to  the 
south  and  west  of  St.  Louis.  From  his  wages  he  had  saved 
enough  to  make  several  small  investments,  and  these  had  proved 
successful.  He  was  the  proud  owner  of  a few  thousand  dollars, 
and  he  determined  to  go  into  the  oil  business.  He  became 
acquainted  with  Mr.  Finlay,  disclosed  his  plans,  and  so  impressed 
that  cautious  gentleman  that  he  was  offered  a partnership  in 
the  St.  Louis  Oil  company,  w'hich  had  succeeded  J.  R.  Finlay 
& Co. 

In  I860,  when  Henry  Clay  Pierce  was  less  than  nineteen 
years  of  age,  he  acquired  Mr.  Finlay’s  interest  and  changed 
the  name  of  the  concern  to  H.  C.  Pierce  & Co.  Thus  in  five 
years  the  country  boy  from  Watertown  had  risen  to  the  control 
of  the  leading  oil  company  west  of  Ohio.  He  neither  knew 
nor  feared  Rockefeller.  His  sole  ambition  was  to  build  up  a 
great  company  in  the  Southwest,  which  should  perpetuate 
his  name  and  bring  him  that  wealth  and  power  which  all  the 
moralists  and  political  economists  of  that  day  held  should  be 
the  aspiration  of  every  American  youth. 


—10— 


Chapter  IV. 

THE  CON(}l'EST  OF  .V  WILDERNESS 


John  D.  Rockefeller  was  bom  in  1S39,  on  July  S.  Several 
years  ago  I visited  Richford,  X.  Y.,  where  he  was  born,  and 
spent  a week  or  more  in  Owego,  where  he  lived  for  years  and 
went  to  school.  I found  that  there  was  no  truth  in  the  tales 
of  his  early  poverty.  His  father,  William  A.  Rockefeller,  spent 
little  time  in  Owego.  His  business  was  a mystery  and  a source 
of  much  gossip  and  head-wagging  in  the  little  town,  but,  what- 
ever his  occupation  was,  the  income  was  sufficient  to  maintain 
his  family  in  comfort,  and  to  afford  the  Rockefeller  boys  an  edu- 
cation in  an  excellent  private  academy.  There  never  was  a time 
during  John  D.  Rockefeller’s  boyhood  when  he  was  forced  to 
earn  a penny,  and  his  father  gave  him  most  of  the  money  with 
which  he  made  his  business  start. 

Possibly  this  has  no  proper  place  in  my  narrative,  but  I 
repeat  it  on  all  possible  occasions  for  the  purpose  of  confounding 
those  who  think  that  there  is  some  special  merit  in  arising 
from  abject  poverty  to  a position  in  which  it  is  possible  to  levy 
tribute  on  an  entire  nation.  Again,  I repeat.  Rockefeller  was 
denied  the  blessings  of  boyhood  poverty. 

At  the  age  of  19  we  find  him  in  Cleveland,  one  of  the  members 
of  the  commission  firm  of  Clark  & Rockefeller.  The  concern 
did  a business  of  S450,000  the  first  year,  and  did  better  the 
second  and  third  years.  Then  the  war  came,  but  young  Rocke- 
feller did  not  put  on  a uniform  and  march  to  the  front.  That 
is  a matter  of  official  record.  Incidentally,  it  may  be  mentioned 
that  many  of  our  great  fortunes  were  founded  by  men  who  had 
s,ufficient  will  power  to  restrain  their  impulse  to  save  their  coun- 
try by  fighting.  In  1862  Samuel  Andrews  induced  Clark  & 
Rockefeller  to  go  into  the  oil  refining  business.  In  1865  Rocke- 
feller became  an  active  partner  in  oil  refining,  and  in  1870  he 
organized  the  first  Standard  Oil  company.  He  had  invented 
the  railroad  rebate,  and  with  that  as  a weapon  the  oil  trade 
was  at  his  mercy,  but  many  years  were  to  pass  before  his  genius 
for  intrigue  and  organization  made  itself  nationally  felt. 

MODEST  START  OF  H.  C.  PIERCE. 

It  was  in  1860,  a year  before  the  formation  of  the  Standard 
Oil  company,  that  Henry  Clay  Pierce  first  saw'  his  name  on  a 
business  sign.  He  found  himself  in  control  of  an  oil  trade  which 
did  not  extend  much  outside  the  city  limits  of  St.  Louis,  and 
he  knew  that  he  would  have  to  fight  for  every  foot  of  advance. 

This  was  in  the  heyday  of  cut-throat  competition.  In 
every  line  of  business,  from  the  retail  grocery  to  great  railroads, 
banks  and  factories  it  was  war  to  the  knife.  “The  devil  take 
hindermost”  was  the  business  motto,  and  preachers,  editors 
and  political  economists  all  joined  in  urging  the  combatants 
on  to  more  desperate  struggles. 

Only  a few  cranks  dissented  from  the  justice  of  the  theory 
of  the  survival  of  the  fittest,  and  boys  were  taught  in  school  to 
gird  on  their  business  armor  and  smite  every  rival  hip  and 
thigh.  No  mercy,  no  compromise,  no  combination,  but  relent- 
less war — with  bankruptcy  and  disgrace  for  the  weaker,  and 
riches  and  laurel  wreaths  for  the  stronger — such  was  the  indus- 
trial and  financial  program  mapped  out  in  those  gentle  and  good 
old  days  which  clustered  around  1870. 

Hence  it  was  that  John  D.  Rockefeller,  Henry  Clay  Pierce, 
John  Smith  and  5,000,000  other  young  men  started  on  a race 
for  wealth  and  honor,  and  all  the  wise  editors,  solemn  preachers 
and  stupid  philosophers  were  a unit  in  asserting  that  under 
such  circumstances  no  individual  or  combination  of  individuals 
could  get  much  the  best  of  it.  Why?  Because,  they  said, 
there  would  be  so  much  competition  that  high  prices  could 
not  be  maintained. 

“Get  it  all,  if  you  can,  my  boy,’’  they  advised,  and  then 
added,  with  complacent  smiles,  “but  you  can’t.  Competition 
won’t  let  you!’’ 


Rockefeller  and  a few'  others  fooled  them.  John  D.  played 
against  a game  which  these  wise  old  bander-legs  indorsed  and 
declared  could  not  be  beaten,  and  now  he  has  most  of  the  chips. 
He  has  killed  competition  with  competition.  In  the  lovely 
little  game  of  the  “survival  of  the  fittest’’  John  D.  Rockefeller 
is  IT,  and  those  who  pretend  that  they  like  the  game  should 
not  welch.  I don’t  like  the  game  and  have  been  saying  so  for 
twenty  years  or  more — but  this  is  not  my  autobiography. 

THE  STANDARD  OIL  COMPANY  IN  1870. 

Young  Pierce  was  not  much  concerned  with  the  doings 
of  the  Standard  Oil  company  when  he  started  in  business.  It 
was  not  the  household  word  in  1870  that  it  is  to-day.  Rockefeller 
did  only  about  10  per  cent  of  the  refining  in  Cleveland,  and 
Pittsburg  was  a larger  refining  center  than  Cleveland.  All 
of  the  oil  producers  and  refiners  were  engaged  in  a cat  and  dog 
fight.  Mr.  Rockefeller  was  so  busy  with  his  plans  for  their 
benevolent  assimilation  that  he  had  not  even  heard  of  the  new 
firm  of  H.  C.  Pierce  & Co.  The  young  head  of  this  concern 
did  not  know  Rockefeller  and  proceeded  to  buy  oil  where  he 
could  get  it  the  cheapest,  and  to  sell  it  for  all  he  could  exact 
from  his  customers.  This  is  business,  and  all  there  is  to  business. 
Possibly  he  bought  some  of  his  oil  from  Rockefeller,  but  that 
was  not  then  considered  a crime. 

It  was  in  1870  that  Pierce  made  his  first  extensive  explora- 
tion of  the  Southwest  in  the  interest  of  his  oil  company.  Prior 
to  this  time  oil  had  been  sent  down  the  Mississippi  in  barges. 
Kerosene  and  other  products  of  petroleum  were  not  unknown 
in  the  towns  along  the  rivers,  but  the  great  mass  of  the  people 
in  Missouri,  Arkansas,  Texas  and  Louisiana  never  had  seen  an 
oil  lamp.  There  were  few  railroads,  and  most  of  the  country 
was  as  wild  as  when  De  Soto  looked  for  the  first  time  on  the 
swelling  flood  of  the  Mississippi,  yet  out  into  this  sparsely 
settled  wilderness  went  the  beardless  Pierce,  preaching  the 
gospel  of  kerosene  oil. 

PREACHING  THE  GOSPEL  OF  KEROSENE. 

Population  had  begun  to  pour  into  Southern  Missouri, 
and  his  mission  promised  to  bear  future  profits.  In  each  little 
village  he  selected  an  agent,  showed  him  how  to  fill,  trim  and 
care  for  a lamp,  and  made  arrangements  for  transporting  a 
regular  supply  of  illuminating  and  lubricating  oils  to  that  cen- 
ter. This  was  an  easy  matter  in  towns  along  railroads,  but 
Pierce  knew  that  he  must  forestall  the  railroads  if  he  was  to  have 
the  full  reward  of  those  who  hustle. 

The  young  oil  merchant  realized  that  the  towns  were  small 
and  widely  scattered,  but  he  believed  in  the  dawning  greatness 
of  the  Southwest.  He  pictured  to  himself  this  future  country 
filled  with  large  and  prosperous  towns,  and  all  of  them  using 
his  oil.  Why  not?  He  was  the  first  in  the  field.  Pierce  did  not 
discover  Texas,  but  it  is  a certainty  that  he  was  the  first  to  dis- 
cover that  oil  could  be  sold  in  it.  You  may  be  sure  that  he  did 
not  reach  Dallas  in  a Pullman  car. 

The  jirojihetic  vision  of  this  young  enthusiast  led  him  astray 
concerning  Arkansas.  The  maj)  showed  that  there  was  such  a 
State,  and  that  it  had  towns  and  rivers.  He  journeyed  through 
it  on  horseback,  carrying  his  samples  and  lamps  on  a jxick 
mule.  He  forded  rivers,  was  mired  in  swamps,  devoured  by  mos- 
quitos, attacked  by  wild  animals,  was  famished  for  food  and 
stricken  with  fever,  but  he  criss-crossed  the  State  without 
striking  a town  in  which  he  could  induce  a man  to  rejiresent  a 
company  which  entertained  the  childish  scheme  that  it  was 
possible  and  profitable  to  import  from  Pennsylvania  a product 
which  would  compete  with  Arkansas  pine  knots  and  tallow  dips. 
In  a two  months’  trij),  crowded  with  discomforts  aiul  dangers, 
he  did  not  arrange  for  the  sale  of  one  gallon  of  oil.  True,  he  has 


sold  some  oil  in  Arkansas  since  then,  but  the  old  Sunday  school 
books  said  that  such  was  his  just  reward. 

PIERCE  EVTRODUCES  OIL  IN  TEXAS. 

I am  unable  to  find  that  any  individual  or  concern  had  made 
it  a business  to  ship  and  sell  oil  in  Texas  prior  to  the  coming  of 
young  Pierce  with  his  lamps  and  his  samples  in  1870.  It  is 
likely  that  a few  small  shipments  were  made  and  it  is  probable 
that  some  enterprising  ship  owner  may  have  unloaded  a few 
barrels  of  kerosene  at  Galveston,  or  that  a merchant  may  have 
freighted  a little  of  this  strange  fluid  in  from  New  Orleans,  but  the 
fact  remains  that  the  19-year-old  head  of  the  firm  of  H.C.  Pierce 
& Co.  was  the  pioneer  in  building  up  a system  by  which  the 
products  of  petroleum  could  be  transported  from  Pennsylvania 
and  sold  regularly  in  Texas. 

Thirty-seven  long  years  have  passed  since  this  boy  made  his 
initial  tour  of  the  Lone  Star  State.  He  made  the  trip  on  horse- 
back— save  for  the  few  points  then  connected  by  railroads — 
and  he  did  not  cease  until  he  had  canvassed  every  village  of  im- 
portance east  of  San  Antonio.  He  appointed  agents  in  Galveston 
Houston,  Austin,  San  Antonio,  Waco,  Dallas,  Fort  Worth, 
Sherman  and  other  towns,  and  arranged  for  crude  means  of 
storing  the  oil  when  it  was  forwarded.  Most  of  the  merchants 
approached  scoffed  at  the  claims  made  by  young  Pierce,  and  all 
wondered  at  his  enthusiasm,  but  none  of  them  charged  that  he 
was  engaged  in  a Standard  Oil  conspiracy. 

This  strange  quest  consumed  nearly  eight  months  and  ex- 
hausted the  endurance  of  many  horses,  but  the  young  man  laughed 
at  fatigue,  and  his  day  and  night  dreams  were  of  an  oil  business 
which  should  radiate  in  all  directions  from  St.  Louis,  and  which 
should  grow  with  the  certain  development  of  the  country  he 
had  explored  and  preempted.  He  remained  in  Texas  long 
enough  to  supervise  the  installation  of  the  new  system  and  then 
returned  to  St.  Louis  by  rail  via  New  Orleans. 

I have  omitted  an  interesting  and  romantic  event  in  the 
career  of  Henry  Clay  Pierce.  Shortly  before  the  trip  just  described 
he  married  the  daughter  of  John  Robert  Finlay,  the  Scotch 
pioneer  of  the  coal  oil  industry  in  the  United  States,  and  the 
man  who  founded  the  business  which  has  since  developed  into 
the  enormous  enterprise  with  which  Mr.  Pierce’s  name  has  been 
connected. 

He  had  barely  passed  his  eighteenth  year  when  he  led 
Miss  Finlay  to  the  altar.  It  was  an  old-fashioned  love  match, 
one  which  preceded  long  and  happy  years  of  ideal  married  life, 
blessed  by  children  of  which  the  parents  were  justly  proud. 
In  these  later  days,  when  success  and  wealth  seem  to  drag 
marital  troubles  and  scandals  in  their  train,  it  is  refreshing  to 
glance  back  for  a moment  to  the  years  when  husbands  and  wives 
shared  willingly  and  steadfastly  in  the  joys  and  the  sorrows, 
the  triumphs  and  the  disasters  which  fate  allotted  them.  It 
gives  one  faith  in  humanity  to  look  back  at  this  boy  and  girl  as 
they  bravely  faced  the  future,  and  we  wonder  if  we  have  im- 
proved on  the  old  system  of  youthful  marriages  by  postponing 
such  unions  until  the  contracting  parties  have  reached  the  years 
which  are  alleged  to  bring  discretion?  I doubt  if  w’e  have. 
Mrs.  Pierce  lived  to  witness  the  realization  of  many  of  her  hus- 
band’s dreams,  but  passed  away  after  a brief  illness  in  1889. 

HIS  CONQUEST  IN  MEXICO.  • 

In  the  early  seventies  Mr.  Pierce  carried  his  oil  conquests 
into  Mexico.  His  associates  doubted  if  it  were  possible  to  intro- 
duce oil  with  profit  into  the  huge  but  thinly  settled  republic 
south  of  the  Rio  Grande,  but  the  young  general  urged  that 
temporary  losses  would  be  amply  requited  by  the  prestige 
which  w’ould  come  from  being  first  in  the  field.  He  therefore 
traveled  all  over  Mexico,  having  first  mastered  the  Spanish  lan- 
guage, and  within  a year  succeeded  in  so  perfecting  a distributing 
organization  that  the  business  showed  a profit.  Later  he  erected 
refineries  at  suitable  points  in  Mexico,  shipping  the  crude  pe- 
troleum in  his  own  boats  down  the  Ohio  and  Mississippi  across 


. the  Gulf  of  Mexico,  or  from  the  Atlantic  seaboard  to  Tampico 
and  Vera  Cruz. 

Those  who  have  been  led  to  believe  that  Mr.  Pierce  has 
ever  been  only  a pawm  played  by  the  mighty  Rockefeller,  should 
know'  that  all  this  an<J  much  more  had  been  accomplished 
by  the  young  St.  Louis  merchant  years  before  the  shadow  of 
the  oil  colossus  reached  across  the  Ohio.  Rockefeller  was  then 
engaged  in  a titanic  struggle  for  supremacy  in  the  Pennsylvania 
oil  fields.  He  was  fighting  in  a mob  of  frenzied  operators  and 
refiners,  each  of  whom  w'as  as  greedy  and  rapacious  as  himself. 
It  was  a display  of  competitive  savagery,  and  had  Rockefeller 
show'n  one  moment  of  weakening  or  evinced  one  spark  of  sympa- 
thy, some  other  wolf  would  now  head  the  oil  pack. 

In  the  lulls  of  the  battle  Rockefeller  may  have  glanced  anx- 
iously and  longingly  to  the  West,  and  it  is  likely  that  the  energy 
displayed  by  Henry  Clay  Pierce  was  not  overlooked  by  the  future 
oil  king,  but  he  was  too  wise  and  too  great  a master  of  industrial 
strategy  to  scatter  his  forces  in  that  crisis.  Thus  it  happened 
that  Pierce  w'as  permitted  to  take  commercial  possession  of 
the  Southwest  and  of  the  Republic  of  Mexico  almost  without 
opposition.  Later  he  was  attacked,  and  many  were  the  battles 
fought,  but  he  ever  held  the  advantage  of  the  general  who 
has  had  the  time  and  forethought  to  fortify  the  high  ground, 
and  to  mass  his  troops  at  the  w'eaker  points. 

PIERCE  STRENGTHENS  HIS  FORTIFICATIONS. 

The  echoes  of  the  famous  “oil  war  of  1872”  reached  St. 
Louis,  and  the  victory  of  Rockefeller  in  that  historic  conflict 
directed  some  attention  to  his  personality.  Pierce  had  then 
become  of  age,  but  he  was  a veteran  in  the  oil  trade.  He  realized 
that  he  would  not  always  be  permitted  to  have  his  own  way  in 
the  huge  territory  over  which  his  agencies  were  scattered,  but  he 
kept  at  work  with  an  intense  yet  calm  energy  which  was  not  to 
be  denied.  Railroads  were  pushing  into  the  Southwest  in  every 
direction,  and  with  the  railroads  went  Pierce  or  his  representatives 
locating  their  oil  tanks  in  the  newly  platted  towns. 

William  H.  Waters,  a St.  Louis  capitalist,  became  interested 
in  Pierce  and  offered  to  invest  a considerable  sum  in  his  enter- 
prise. The  younger  man  agreed  to  this,  with  the  stipulation 
that  his  management  of  affairs  should  never  be  interfered  with. 
Upon  this  understanding  the  firm  of  Waters,  Pierce  & Co. 
was  formed.  The  influx  of  this  fresh  capital  inspired  Pierce 
to  new  efforts  and  gave  him  a chance  to  put  into  effect  a scheme 
he  long  had  cherished. 

When  petroleum  was  first  discovered  in  large  quantities 
it  was  stored  in  lakes  formed  by  earthen  embankments.  ■ The 
losses  by  percolation  and  evaporation  were  enormous,  and  the 
next  crude  step  in  advance  was  the  construction  of  wooden 
tanks.  The  oil  w'as  so  volatile  that  its  valuable  gases  penetrated 
these  wooden  walls,  and  no  paints  or  preparations  were  sufficient 
to  confine  this  fluid.  Then  some  genius  hit  on  the  seemingly 
obvious  expedient  of  substituting  iron  for  wood,  and  the  old 
style  tanks  disappeared. 

HE  BECOMES  AN  INVENTOR. 

Oil  was  still  transported  long  and  short  distances  in  wooden 
barrels  and  tanks.  Special  kinds  of  w'ood  of  great  thickness 
were  used  for  this  purpose,  but  despite  this  precaution  the  loss 
from  evaporation  constituted  a large  item.  Pierce  was  the  first 
-to  solve  this  problem.  It  does  not  seem  much  of  an  invention 
these  days,  but  it  is  the  simple  thing  which  hides  the  longer 
from  those  who  seek  a remedy.  The  young  oil  merchant  designed.  / 
manufactured  and  put  into  use  the  first  iron  barrels  ever  used  fo^ 
oil  or  any  other  fluid,  and  with  that  discovery  the  handling  of 
oil  was  revolutionized.  Nor  did  he  stop  there. 

From  the  start  he  had  been  figuring  on  how  to  reach  those 
customers  who  lived  far  from  railroads.  Some  of  these  would 
buy  a can  of  oil  on  those  rare  occasions  when  they  happened  to 
be  in  a town  where  oil  was  stored,  but  Pierce  wished  to  deliver 
it  regularly  at  their  doors.  He  hit  upon  the  plan  of  the  iron 


—12— 


tank  wagon,  was  the  first  to  design  one,  have  it  constructed 
and  put  into  use.  More  than  a quarter  of  a century  has  passed 
since  the  first  wagon  bearing  his  name  wended  its  way  out 
into  the  coimtry  districts  and  into  the  little  villages  and  settle- 
ments remote  from  railroad  communication,  yet  the  tank^/ 
wagons  which  are  in  use  today  vary  but  slightly  from  the  model 
first  introduced  by  Henry  Clay  Pierce. 

It  is  only  fair  to  give  Mr.  Pierce  credit  for  these  striking  im- 
provements in  the  methods  of  handling  oil,  and  it  is  a matter 
of  record  that  he  invented  and  applied  them  years  before  the 


Standard  Oil  company  reached  out  its  long  arm  into  the  M’est  and. 
Southwest.  Space  precludes  mention  of  the  score  of  lesser 
inventions  made  by  the  young  oil  merchant  in  the  years  prior 
to  1880,  and  it  would  require  a book  to  narrate  the  story  of 
his  extension  of  the  oil  business  into  every  city  and  hamlet 
in  the  greater  part  of  Missouri,  all  of  Arkansas,  Indian  Territory, 
Oklahoma,  Texas,  Western  Louisiana  and  the  enormous  extent 
of  the  republic  of  Mexico.  At  the  age  of  25  he  was  so  firmly 
entrenched  in  this  vast  section  that  it  was  necessary  only  to 
defend  its  northern  borders  against  competition. 


Chapter  V. 

THE  STANDARD  REACHES  OUT 


The  crime  popularly  charged  against  the  Waters  Pierce 
Oil  company  is  that  the  Standard  Oil  trust  owns  a majority 
control  of  its  stock.  It  was  on  September  10,  1906,  that  Henry  . 
Clay  Pierce  testified  under  oath  before  Commissioner  Anthony,V 
in  St.  Louis,  that  in  1882  the  majority  of  the  stock  of  his  com- 
pany passed  to  the  Rockefeller  interests. 

That  was  all  the  excited  public  cared  to  know.  Nine  men 
out  of  ten  instantly  construed  this  statement  as  a confession 
of  corporate  guilt,  and  one  which  branded  the  Waters  Pierce 
a capitalistic  outlaw,  doomed  to  be  wrecked  and  hunted  down 
by  the  law  hounds  through  the  jungle  of  the  courts.  The  quarry 
has  been  keenly  trailed  and  closely  pressed,  and  the  brave  baying 
of  the  pack  comes  to  our  ears  from  the  black  depths  of  the 
judicial  forest. 

It  is  of  prime  importance  that  the  student  of  this  case, 
should  know  exactly  how,  when  and  under  what  circumstances 
the  Standard  Oil  acquired  its  interest  in  the  Waters  Pierce. 

Let  me  state  at  the  start  that  this  event  occurred  at  a time 
when  there  was  no  law  and  no  public  sentiment  against  the 
free  and  unlimited  interchange  of  corporate  stocks  and  all  other 
forms  of  property.  In  1882  there  was  not  a clause  in  any  law 
in  force  in  Missouri — where  the  Waters  Pierce  Oil  company 
was  organized — or  in  Texas,  or  in  any  other  State  or  Territory 
in  which  it  operated,  which  could  be  construed  to  prevent 
Mr.  Pierce  or  any  other  stockholder  from  selling  all  or  any 
part  of  his  or  their  stock  to  any  purchaser. 

Years  were  to  pass  before  the  National  congress  should 
enact  its  first  anti-trust  law,  and  then  yet  more  years  before 
the  higher  courts  affirmed  its  validity. 

EX  POST  FACTO  LAWS. 

The  Constitution  of  the  United  States,  in  article  1,  section 
9,  clause  3,  declares  that  "no  ex  post  facto  law  shall  be  passed.” 
Reduced  to  plain  English,  this  means  that  no  legislature  shall 
be  permitted  to  pass  an  act  which  shall  reach  back  into  the  past. 
In  other  words,  it  is  forbidden  to  provide  penalties  for  some- 
thing “after  the  act.”  It  is  now  legal  to  transmit  a million 
or  a billion  dollars  worth  of  property  to  an  heir.  Of  course, 
it  is  not  right,  and  when  we  obtain  more  social  and  economic 
sense  we  will  pass  a law  estopping  this  handing  down  of  fabulous 
estates  to  individuals  who  have  done  nothing  to  merit  them,  but 
in  the  meantime  all  such  bequests  must  stand. 

By  the  same  token  there  was  no  law  in  1878  or  in  1882, 
or  for  years  afterward,  preventing  a stockholder  from  selling 
his  holdings  to  John  D.  Rockefeller  or  to  any  other  individual 
who  offered  a satisfactory  price  for  them.  We  now  have  such 
laws,  and  some  of  us  believe  in  their  justice  and  have  faith 
that  they  can  be  enforced.  I shall  not  discuss  that  question, 
but  reiterate  that  in  those  early  years  our  capitalists  were  not 


so  gifted  with  prophetic  instinct  that  they  could  conform  to 
laws  not  then  passed  or  even  seriously  urged. 

And  yet,  mark  you,  unbiased  reader,  the  great  hue  and 
cry  against  Henry  Clay  Pierce  is  based  on  the  fact  that  in  1882 
the  Standard  Oil  company  secured  control  of  the  majority  of 
the  stock  of  the  Waters  Pierce  Oil  compaity.  I shall  now  relate 
how  this  happened. 

TRIUMPH  OF  ROCKEFELLER. 

In  the  years  between  1870  and  1882,  John  D.  Rockefeller 
was  engaged  in  the  greatest  industrial  conquest  ever  recorded 
in  history.  Future  ages  will  accord  him  a place  with  the  great, 
not  because  he  amassed  vast  wealth,  but  because  he  was  the  first 
capitalist  who  discovered  and  applied  the  truth  that  there  is 
greater  economy  and  greater  profit  in  comibination  than  in 
competition.  He  gave  the  world  its  first  great  object  lesson  in 
the  possibilities  of  organized  production.  Single-handed  he 
waged  a war  against  competition.  He  was  possessed  of  the 
idea  that  one  corporation  could  and  should  control  the  oil 
industry  of  the  United  States.  He  saw  the  defects,  stupidities 
and  idiocies  of  our  system  of  society — and  proceeded  to  take 
advantage  of  them.  He  placed  his  finger  on  the  weakness 
and  inefficiency  of  our  system  of  government — and  proceeded 
to  make  it  ridiculous.  Alone  he  entered  the  lists  against  the 
fighting  and  equally  selfish  refiners  of  Oil  Creek  and  Cleveland — 
and  conquered  them  with  the  new  weapon  of  combination.  • 

Rockefeller  revealed  his  plans  to  the  great  railroad  mag- 
nates. They  first  agreed  with  him,  and  then  deserted  him  when 
pressure  was  brought  to  bear  by  his  remaining  competitors. 
He  laid  siege  to  the  refiners  of  Pittsburg  and  compelled  .heir 
surrender.  He  moved  on  Philadelphia  and  crushed  those  who 
had  laughed  at  his  plan  of  campaign.  He  routed  the  forces 
led  by  H.  H.  Rogers,  secured  his  allegiance  and  made  him  sub- 
altern in  command  of  his  Eastern  forces.  He  fought  the  Pennsyl- 
vania and  other  railroads  to  a finish,  humbled  Cassatt  in  1877 
and  received  the  sword  of  William  H.  Vanderbilt  in  the  fol- 
lowing year. 

PIERCE  AND  THE  STANDARD  OIL. 

During  these  events  Mr.  Pierce  bent  every  energy  to  fortify 
himself  in  the  Southwest.  His  position  was  a peculiar  one.  In 
tlie  early  days  he  had  been  a small  producer  in  V'est  Virginia, 
and  had  conducted  a modest  refinery  in  St.  Louis,  but  the  day 
of  small  producers  and  refiners  had  passed.  The  West  i)roduced 
no  oil.  It  was  not  then  dreamed  that  billions  of  gallons  of  petro- 
leum rested  beneath  the  prairies  of  Oklahoma,  Indian  Territory, 
Kansas  and  Texas.  Had  some  "wildcatter”  sunk  a well  in  the 
present  Glenn  pool  district  the  history  of  the  oil  trade  would 
be  far  different  than  it  is. 


—13— 


Mr.  Pierce  was  compelled  to  buy  oil  where  he  could  get 
it,  and  being  a business  man  naturally  bought  it  as  cheaply 
as  possible.  He  became  a customer  of  the  Standard  Oil  company 
as  early  as  1870,  and  in  the  eight  years  which  followed  pur-', 
chased  from  it  and  from  the  various  independent  companies 
which  survived.  He  closed  down  his  refinery  when  it  became 
apparent  that  he  could  buy  from  Rockefeller  and  others  much 
more  cheaply  than  he  could  produce  the  various  by-products 
of  petroleum.  Thus  he  became  distinctively  a merchant,  a 
distributer  of  oil  and  most  of  its  products,  and  he  aimed  to  build 
up  so  perfect  a selling  machine  that  not  even  the  mighty  Rocke- 
feller could  challenge  him  in  the  territory  he  had  pre-empted 
before  the  Standard  Oil  company  was  formed. 

The  conquering  Napoleon  of  the  oil  trade  invented  the 
subsidiary  company  early  in  the  ’70s.  One  of  these  masquerad- 
ing independent  concerns  was  known  as  Chess,  Carley  & Co., 
with  headquarters  in  Louisville.  It  had  the  backing  of  the 
Standard,  and  along  in  1875-6  made  a fierce  attack  on  Waters 
Pierce  & Co.  The  latter  company  had  already  worsted  several 
smaller  concerns  which  had  Rockefeller  backing,  but  wise  in- 
side observers  predicted  that  Chess,  Carley  & Co.  would  drive 
Mr.  Pierce  out  of  Illinois  and  Missouri,  and  that  eventually  it 
would  absorb  for  the  Standard  the  great  business  which  had 
been  reared  by  the  boy  cashier  of  St.  Louis.  They  were  mis- 
taken. 

PIERCE  AS  A FIGHTER. 

Instead  of  retreating,  Mr.  Pierce  boldly  carried  the  war 
into  Kentucky.  Within  a year  he  had  whipped  Chess,  Carley 
& Co.  to  a point  where  they  sued  for  mercy,  whereupon  a truce 
was  agreed  on,  by  the  terms  of  which  the  Louisville  concern 
kept  in  its  old  territory.  Space  does  not  permit  a recital  of  the 
smaller  wars  which  were  instigated  by  the  Standard  and  waged 
against  the  Waters  Pierce,  but  Pierce  held  his  own  and  displayed 
a resourcefulness  and  strategy  which  impressed  Rockefeller 
with  the  idea  that  in  the  young  St.  Louis  oil  merchant  he  had  a 
rival  not  to  be  despised. 

In  1878  Mr.  Pierce  decided  to  reorganize  and  strengthen 
his  company.  He  was  then  buying  most  of  his  supplies  from 
the  Standard,  and  his  relations  to  it  were  those  which  usually 
exist  between  a large  concern  and  a customer  in  good  standing. 
Since  he  was  compelled  to  purchase  chiefly  from  the  Standard, 
he  was  naturally  desirous  of  maintaining  close  business  relations 
with  it,  but  he  also  proposed  to  retain  his  independence.  In 
his  open  letter  to  Governor  Campbell,  Mr.  Pierce  thus  relates  what 
happened; 

“In  1878  I organized  a new  company  with  a capital  stock 
of  $100,000,  of  which  Mr.  Waters  and  I took  40  per  cent,  H.  A. 
Hutchins  and  W.  P.  Thompson  of  Cleveland  40  per  cent  and  Chess, 
Carley  & Co.  of  Louisville  20  per  cent.  It  vras  understood  by 
all  parties  that  I should  retain  absolute  management,  and  that 
my  right  to  dictate  the  company’s  affairs  should  not  be  question- 
ed. Some  years  after  the  organization  of  the  company,  Hutchins, 
Thompson  and  Chess,  Carley  & Co.,  without  my  knowledge, 
transferred  their  interests  to  the  Standard  Oil  company.  I 
purchased  Mr.  Waters’  stock,  and,  though  strongly  urged  to 
place  my  interest  in  the  original  Standard  Oil  trust,  I refused  to 
do  so,  and  in  all  the  years  which  have  followed  I have  controlled 
the  affairs  of  the  Waters  Pierce  Oil  company,  except  for  a brief 
interval  when  illness  forced  my  retirement  from  active  charge 
of  its  affairs.  There  was  then  no  law  and  no  public  sentiment 
against  having  business  relations  with  the  Standard  Oil  company, 
but  I preferred  to  perpetuate  the  name  and  the  business  inde- 
pendence of  the  concern  I had  aided  to  grow  from  humble  be- 
ginnings, and  I have  never  taken  a step  aside  from  that  policy.” 

PIERCE  DEFIES  THE  STANDARD. 

The  transfer  of  the  holdings  of  Hutchins,  Thompson  and 
Chess,  Carley  & Co.  took  place  in  1882,  on  the  formation  of  the 
original  Standard  Oil  trust.  This  was  four  years  after  Mr. 
Pierce  had  admitted  them  as  stockholders.  As  I stated  in  the 


beginning  of  this  chapter,  there  was  no  legal  reason  to  prevent 
them  from  selling  to  the  Standard  or  to  any  other  purchaser, 
and  Mr.  Pierce  had  the  same  privilege,  but  he  refused,  and  later 
defied  the  Standard  Oil  trust  to  oust  him  or  to  disrupt  his  com- 
pany. Mr.  Pierce  stoutly  affirms  that  he  did  all  within  his 
power  to  preserve  the  independence  of  the  Waters  Pierce  Oil 
company,  and  it  is  a matter  of  record  that  he  has  resisted  and 
fought  the  Standard  on  innumerable  occasions. 

There  is  no  reasonable  doubt  that  Standard  Oil  interests 
have  repeatedly  attempted  to  cripple  and  ruin  him,  and  it  is  a 
certainty  that  these  same  interests  are  now  engaged  in  an  active 
conspiracy  to  absorb  the  business  of  the  Waters  Pierce  in  Texas 
and  other  Southwestern  States. 

It  is  the  strange  irony  of  fate  that  the  one  oil  man  in  all 
the  United  States  who  has  succeeded  in  preserving  a semblance 
of  independence  should  be  singled  out  for  the  most  merciless 
and,  at  times,  unfair  prosecution  ever  waged  against  an  official 
of  an  industrial  corporation. 

THE  UNFORGIVABLE  CRIME. 

There  are  minor  charges  against  Mr.  Pierce  and  his  company 
and  I shall  consider  them  in  due  time,  but  any  candid  man  will 
admit  that  no  prosecution  would  have  been  waged  unless  it 
was  suspected  that  the  Standard  was  an  owner  of  stock  in  the 
Waters  Pierce.  It  was  not  until  1889  and  1895  that  the  Texas 
legislature  passed  the  anti-trust  laws  on  which  the  original  con- 
viction was  obtained — it  was  in  1882  that  the  Standard  purchased 
the  stock  which  made  Mr.  Pierce  a minority  holder  in  the  com- 
pany which  bore  his  name.  I wish  to  ask  some  questions, 
answer  those  which  are  easy,  and  seek  information  on  those  which 
are  hard. 

It  is  not  disputed  that  the  Waters  Pierce  Oil  company  was 
independent  of  the  Standard  in  all  the  years  prior  to  1882.  In 
that  year  Hutchins,  Thompson  and  Chess,  Carley  & Co.  trans- 
ferred their  stock — amounting  to  60  per  cent  of  the  total — to  the 
newly  formed  Standard  Oil  trust.  It  seems  certain  that  there 
was  no  law  forbidding  such  transfer.  I have  never  heard  it 
stated  that  there  was  such  a law,  but  let  us  assume,  for  the  sake 
of  argument,  that  there  was.  This  suggests  the  first  question, 
viz:  How  did  the  sale  of  stock  by  Hutchins,  Thompson  and 

Chess,  Carley  & Co.  to  the  Standard  implicate  Henry  Clay  Pierce 
in  this  alleged,  crime? 

How  could  he  prevent  any  one  of  these  stockholders  from 
sejliqg  to  the  Standard  Oil  trust?  Let  us  put  this  shoe  on  our 
own  foot  and  see  how  it  fits. 

Supposed,  unbiased  reader,  that  you  and  I and  Smith  and 
Jones  form  a company  to  compete  with  the  sugar  trust,  and  that 
each  of  us  owns  one-quarter  of  the  stock.  Now  suppose  that  after 
our  company  has  attained  a fair  measure  of  success  that  Smith, 
Jones  and  I quietly  transfer  our  holdings  to  the  sugar  trust — 
do  you  become  a criminal  because  we  have  entered  into  a con- 
spiracy in  restraint  of  trade?  I hardly  think  so. 

SOME  HARD  QUESTIONS. 

Yet  this  was  the  measure  of  Mr.  Pierce’s  offending — in 
fact,  it  was  far  less.  One  of  the  three  stockholders  had  given 
Mr.  Pierce  an  option  on  his  holdings,  which  option,  if  exercised, 
would  have  guaranteed  his  continued  control.  The  sale  was 
made  in  disregard  of  this  option,  and  Mr.  Pierce  awoke  one  morn- 
ing to  learn  that  60  per  cent  of  the  stock  of  his  company  had 
passed  to  the  great  oil  trust.  I doubt  if  it  then  occurred  to  him 
that  this  event  would  one  day  brand  him  a criminal,  and  make 
of  his  company  an  outlaw. 

Since  it  is  popularly  assumed  that  a corporate  crime  was 
committed  when  the  legal  control  of  the  Waters  Pierce  passed 
to  the  Standard,  it  is  well  to  locate  the  criminal  or  criminals. 
Mt.  Pierce  absolutely  refused  to  sell  his  stock  to  the  Standard*/" 
and  threatened  to  begin  open  war  on  that  trust  unless  permittee! 
to  retain  actual  control  of  the  Waters  Pierce  Oil  company,  the 


—14— 


independence  of  which  he  insisted  should  be  recognized.  That 
was  his  ultimatum.  Did  this  threat  make  him  a criminal? 

What  more  could  he  do?  The  sale  had  been  effected,  and 
the  stock  certificates  rested  in  the  great  vaults  of  the  Standard 
Oil  company.  Not  only  did  the  Standard  refuse  to  consider 
the  sale  of  this  stock  to  Mr.  Pierce,  but  it  brought  all  possible 
pressure  to  bear  to  force  him  to  relinquish  his  40  per  cent. 
Suppose  he  had  consented  to  sell  that  stock  to  the  trust  and 
taken  their  certificates  in  exchange?  He  would  then  have  be- 
come a component  part  of  the  greatest  of  all  the  trusts,  and  a 
criminal  per  se.  But  he  refused  this  chance  to  become  a 
Standard  Oil  magnate,  and  still  some  of  us  insist  that  1882  made 
him  an  outlaw. 

WHEX  DID  PIERCE  BECOME  A CRIMINAL? 

Xo  man  whose  opinion  is  worth  considering  will  affirm 
that  Henry  Clay  Pierce  was  a party  to  any  corporate  or  moral 
wrong  through  the  passing  of  the  legal  control  of  the  Waters 
Pierce  Oil  company  to  the  Standard  in  1882.  That  was  more 
than  a quarter  of  a century  ago.  Suppose  that  public  announce- 
ment had  been  made  at  that  time  of  the  passing  of  60  per  cent 
of  the  stock  of  the  Waters  Pierce  to  the  Standard?  Would  law 
proceedings  have  been  brought  against  Hutchins,  Thompson 
and  Chess,  Carley  & Co.?  Xo.  The  Standard  thus  openly 
acquired  scores  of  competing  and  outlying  concerns,  and  no  law 
intervened  or  could  intervene.  Corporate  secrecy  was  not  then 
a crime.  The  Standard  and  the  men  who  sold  to  it  were  clearly 
within  their  legal  rights. 

If  there  be  virtue  in  contending  for  corporate  independence, 
Henry  Clay  Pierce  deserves  praise  for  resisting  the  demands  of 
the  Standard  in  1882.  If  there  be  such  a thing  as  capitalistic 
braverj' — and  there  certainly  is  such  a trait — he  showed  it  when 
he  stood  alone  against  the  stupenduous  might  of  the  Standard. 

Xote  carefully  what  follows:  At  no  time  since  the  Standard 

coup  of  1882  has  Mr.  Pierce  had  a chance  to  oust  the  oil  trust 


from  the  domination  it  then  obtained  through  broken  promises. 
The  records  show  that  he  has  never  owned  one  share  of  Standard 
stock,  or  of  any  oil  stock  other  than  that  of  the  Waters  Pierce; 
that  he  has  striven  with  all  his  energy  to  maintain  the  inde- 
pendence of  the  Waters  Pierce,  and  that  he  has  been  strong 
enough  to  compel  the  fear  and  respect  of  the  Rockefeller  magnates. 
Now,  I ask,  just  at  what  time  and  in  what  way  did  Henry  Clay 
Pierce  become  a part  of  a Standard  Oil  conspiracy. 

Surely  the  passage  of  the  Texas  anti-trust  laws  of  1889  and 
1895  did  not  make  him  a criminal  conspirator?  His  position 
after  their  passage  was  exaetly  the  same  that  it  had  been  every 
day  in  the  preceeding  thirteen  years.  No  ex  post  faeto  law 
ean  place  the  brand  of  infamy  on  a man.' 

WHEN  THE  STORM  BROKE. 

Not  until  Mr.  Pierce  took  the  stand  in  St.  Louis  on  Septem- 
ber 10,  1906,  and  frankly  told  how  the  Standard  Oil  trust  ob- 
tained an  interest  in  the  Waters  Pierce  in  1882,  then,  and  not 
until  then,  was  the  strange  discovery  made  that  he  had  been 
engaged  in  a life-long  conspiracy  with  Rockefeller  to  rob  and 
oppress  the  people  of  the  Southwest. 

I am  not  holding  Henry  Clay  Pierce  up  as  a hero  or  as  a 
martyr,  but,  to  use  blunt  English,  I firmly  believe  that  he  has 
gotten  the  worst  of  it.  It  seems  to  me  unjust  that  the  one 
man  who  has  had  the  nerve,  brains,  energy  and  money  to  stand 
like  a rock  against  the  brute  strength  and  Machiavelian  cunning 
of  the  Standard  Oil  trust  should  shoulder  its  obloquy.  It  seems 
to  me  unfair  that  there  should  be  charged  against  him  all  the 
crimes  of  which  that  merciless  combination  is  guilty;  it  seems 
to  me  most  unfortunate  that  passion,  prejudiee  and  political 
intrigue  should  be  invoked  against  him  rather  than  a calm  and 
unbiased  consideration  of  the  essential  facts,  and  in  the  chapters 
which  follow  I shall  state  these  facts  as  they  appear  in  sworn 
testimony. 


dbapter  VI. 

SOJIE  PERTINENT  QUESTIONS 


The  fact  that  the  Standard  Oil  compafiy  secured  posses- 
sion of  the  majority  of  the  stock  of  the  Waters  Pierce  is  ancient 
history,  yet  nothing  creates  more  excitement  than  the  recurrent 
announcement  of  that  fact.  When  I was  a child  my  mother 
told  with  vivid  detail  the  story  of  a fire  which  came  near  destroy- 
ing our  ancestral  cottage.  In  response  to  my  pleadings  she  told 
that  tale  at  least  three  times  a week  for  years  and  despite  the 
fact  that  I knew  every  detail  by  heart  each  successive  telling 
had  all  the  thrill  of  the  first. 

Thus  it  is  with  us  older  children  when  the  headlines  inform 
us  that  the  startling  discovery  has  been  made  that  the  Standard 
Oil  trust  owns  a majority  of  the  Waters  Pierce.  At  the  start 
this  news  item  made  no  popular  hit.  If  the  Standard  or  Waters 
Pierce  had  wished  to  acquaint  the  people  of  Texas  with  that 
fact  in  1882,  the  year  it  happened,  they  would  have  been  com- 
pelled to  advertise  it  on  an  extensive  and  expensive  scale.  Texas 
wasn’t  bothering  about  such  matters  in  1882. 

I am  unable  to  ascertain  just  when  the  first  public  announce- 
ment was  made  of  the  relations  existing  between  the  Standard 
and  the  Waters  Pierce.  Every  w’ell  informed  oil  man  knew 
it  from  the  beginning.  It  became  a part  of  a congressional  / 
document  in  1888,  at  which  time  the  National  house  of  repre-*^ 
sentatives  made  its  first  investigation  of  the  trusts.  You  will 


find  it  displayed  on  pages  307-313  of  house  report  No.  3112, 
wherein  is  contained  the  Standard  Oil  trust  agreement,  which 
affirms  that  a portion  of  the  stockholders  of  the  Waters  Pierce 
Oil  company  were  members  of  the  Standard  Oil  trust. 

WHAT  WAS  KNOWN  IN  1888. 

This  damning  fact  was  made  public  in  1888,  and  it  is  likely 
that  the  Washington  correspondents  of  Southwestern  papers 
wired  the  fact  to  their  home  offices,  but  it  is  certain  that  the 
disclosures  created  no  riots.  In  the  following  year  Texas  passed 
her  first  anti  trust  law.  Her  officials  must  have  known  that 
the  Standard  owned  stock  in  the  Waters  Pierce — they  could 
not  well  escape  the  faet — and  yet  it  did  not  occur  to  them  to 
bring  suit  against  the  Waters  Pierce  because  certain  of  its 
stockholders  chose  to  transfer  their  stock  to  the  Standard.  I am 
not  arguing  that  they  should  not  have  taken  such  action;  I 
am  simply  trying  to  show  that  it  took  a long  time  to  focus 
public  wrath  on  the  Waters  Pierce. 

The  truth  of  the  matter  is  that  no  one  at  that  time  cared 
anything  about  it.  It  was  in  accord  with  the  great  industrial 
movement  then  well  under  way.  The  year  1895  rolled  around,  , 
and  the  State  of  Texas  brought  its  first  suit  under  the  anti-trust ' 
law  against  the  Waters  Pierce.  In  that  suit  the  fact  was  brought 


—15— 


out  that  the  Standard  owned  some  of  its  stock.  This  provoked 
mild  interest,  but  the  public  forgot  all  about  it  until  the  case 
was  heard  on  appeal,  whereupon  the  repetition  of  the  tale  of 
the  alliance  created  some  comment.  As  the  case  progressed 
through  the  wonderful  maze  of  our  courts  the  continued  revelation 
of  the  fact  that  the  Standard  acquired  Waters  Pierce  stock 
in  1882  created  a progressive  sensation.  It  took  so  long  for  the 
Supreme  Court  of  the  United  States  to  pass  on  the  case  that 
most  persons  had  forgotten  that  the  suit  was  ever  started,  but 
the  mandate  finally  came,  and  the  public  was  properly  surprised^ 
and  pleased  to  learn  that  the  Waters  Pierce  had  been  ousted 
from  Texas.  It  w'as  then  falsely  asserted — as  I shall  later  prove — 
that  this  verdict  was  affirmed  against  the  Waters  Pierce  Oil 
company  because  of  its  affiliation  wdth  the  Standard. 

This  was  early  in  1900.  Later  in  the  year  a new  company 
was  formed  and  admitted  into  Texas,  and  in  the  subsequent 
row  over  the  granting  of  a permit  the  startling  discovery  was 
made  that  the  Standard  had  owned  Waters  Pierce  stock  since 
1882.  Five  years  of  peace  followed,  and  then  came  the  Gruet 
disclosures  to  the  same  effect.  The  discovery  of  a plot  to  blow 
up  the  State  legislature  could  not  have  created  more  of  a sensa- 
tion. Men  who  had  read  the  same  thing  a dozen  times  before 
declared  that  they  had  always  suspected  it,  and  demanded 
great  credit  for  their  foresight.  When  Mr.  Pierce  took  the 
stand  in  St.  Louis  and  told  the  old  familiar  story  over  again 
it  sounded  as  fresh  and  new  as  a George  Cohan  song,  but  this 
did  not  estop  some  of  our  enterprising  papers  from  springing 
it  as  a “beat”  when  it  bobbed  up  once  more  in  tlie  recent  Bailey 
investigation. 

HARRIMAN  AND  FISH. 

Notwithstanding  the  antiquity  and  continuous  reiteration 
of  this  “disclosure”  there  is  much  bitter  feeling  against  Mr. 
Pierce  because  of  his  alleged  duplicity  in  failing  to  take  the  public 
into  his  confidence  in  this  matter.  In  passing  I desire  to  record 
this  opinion:  If  a list  were  published  to-day  of  all  of  the  rail- 

roads, industrial  enterprises,  banks,  newspapers,  mines  and  other 
investments  controlled  by  the  Standard  Oil  company  it  would 
be  found  that  hundreds  of  thousands  of  men  and  women  were 
consciously  or  unconsciously  implicated  in  the  Standard  Oil 
conspiracy.  Stuyvesant  Fish  is  now  making  a fight  to  keep 
the  Illinois  Central  railroad  from  falling  into  the  hands  of  Harri- 
man.  Harriman  does  the  bidding  of  the  Standard,  operates 
with  its  money,  and  his  every  important  move  is  dictated  from 
26  Broadway.  There  is  no  dispute  about  this. 

Now'  suppose  that  Harriman,  this  Standard  Oil  agent, 
succeeds  in  executing  its  plans?  Suppose  that  Mr.  Fish  and 
his  associates  are  forced  into  the  position  of  minority  holders 
of  this  stock,  and  that  the  policy  of  the  Illinois  Central  is  dic- 
tated in  future  by  a Standard  Oil  board  of  directors.  Do  Mr. 
Fish  and  the  other  honest  stockholders  of  this  great  road 
become  criminal  conspirators  by  reason  of  the  fact  that  the 
road  is  merged  against  their  w'ill  with  the  Rockefeller  combine? 
The  only  difference  is  that  the  Standard  moved  secretly  against 
Mr.  Pierce;  it  is  compelled  to  operate  more  or  less  in  the  open 
against  Mr.  Fish.  It  would  be  possible  to  enumerate  a hundred 
similar  instances.  Let  us  resume  our  history. 

THE  STANDARD  OIL  AGREEMENT. 

In  1882  the  owners  of  60  per  cent  of  the  stock  of  the  Waters 
Pierce  transferred  their  holdings  to  the  newly  formed  Standard 
Oil  trust.  Mr.  Pierce  and  Mr.  Waters  were  the  only  ones  who 
refused  to  go  into  that  merger.  The  famous  Standard  Oil  trmst 
agreement  of  1882  has  been  a public  document  for  nearly 
tw'enty  years.  There  were  three  classes  of  parties  to  that  agree- 
ment. The  first  class  included  “all  the  stockholders  and  mem- 
bers” of  fourteen  corporations,  including  the  Standard  Oil  com- 
pany. That  constituted  a complete  merger,  so  far  as  these 
fourteen  companies  w'ere  concerned.  The  U (iters  Tierce  Oil 
company  was  not  included  in  Umt  list. 

The  second  class  consisted  of  “the  following  individuals,” 
forty-six  in  all,  including  such  familiar  names  as  John  D.  Rock- 


efeller, William  Rockefeller,  John  D.  Archbold,  H.  M.  Flagler, 
Charles  Lockhart,  O.  H.  Payne,  Henry  H.  Rogers,  Charles  M. 
Pratt,  H.  A.  Hutchins  and  W.  P.  Thompson.  The  latter  two 
were  owners  of  40  per  cent  of  the  stock  of  the  Waters  Pierce, 
but  they  were  also  owners  of  large  blocks  of  stocks  in  other 
companies,  all  of  which  they  transferred  to  the  trust. 

The  name  of  Henry  Clay  Pierce  was  not  on  that  list.  He 
has  never  owned  a share  of  Standard  Oil  stock. 

The  third  class  consisted  of  “a  portion  of  the  stockholders 
and  members  of  the  following  corporations  and  limited  partner- 
ships,” to  the  number  of  twenty-six,  the  last  named  of  which 
was  the  Waters  Pierce  Oil  company.  In  some  instances  the 
Standard  secured  control  of  a minority  of  the  stock  of  these 
companies,  and  in  other  cases  it  obtained  a majority  control. 

ACTION  OF  THE  COURTS. 

I have  been  criticised  in  some  quarters  for  alleged  reflections 
on  the  courts  because  they  have  “adjudged  the  Waters  Pierce 
a trust  on  account  of  the  purchase  by  the  Standard  of  a majority 
of  its  stock.”  Such  criticism  has  no  basis  in  fact.  In  the  first 
case  no  court  of  competent  jurisdiction  has  declared  the  Waters 
Pierce  Oil  company  a trust  on  that  account.  In  the  second 
place,  the  Court  of  Civil  Appeals  of  Texas  distinctly  ruled,  as  I 
shall  detail  later,  that  the  “Standard  Oil  trust  agreement  of 
1882”  did  not  involve  the  Waters  Pierce  to  the  extent  of  making 
it  a part  of  the  trust.  In  the  third  place,  the  company  w’as 
not  ousted  from  Texas  by  the  Supreme  Court  of  the  United 
States  on  any  ruling  affirming  that  it  was  a trust. 

What  the  law  is  on  this  subject  I do  not  know,  and  none 
of  us  will  know  until  the  case  is  carried  to  the  Supreme  Court 
of  the  United  States.  I am  discussing  the  ethics  of  this  question, 
as  I have  a right  to  do,  and  am  yet  to  be  convinced  that  H.  C. 
Pierce  became  a criminal  because  Hutchins,  Thompson  and 
others  joined  the  Standard  Oil  trust  in  1882. 

When  the  Waters  Pierce  Oil  company  was  formed  in  1878  / 
its  directors  were  William  H.  Waters,  H.  C.  Pierce,  William  P.\/ 
Thompson,  Horace  A.  Hutchins  and  Francis  D.  Carley.  These 
same  directors  continued  in  office  after  the  Standard  obtained 
the  majority  of  the  stock  in  1882,  and  no  change  W'as  made 
until  1885.  Mr.  Waters  was  nominally  president,  but  he  took 
no  active  interest  in  the  affairs  of  the  company,  the  management 
of  which  fell  to  Mr.  Pierce.  None  of  the  other  directors  lived 
in  St.  Louis,  and  they  were  merely  figureheads  representing  the 
holdings  of  the  Standard.  In  1882  the  capital  stock  was  in- 
creased to  $400,000,  but  the  proportions  remained  the  same, 
Waters  and  Pierce  retaining  40  per  cent. 

' CHARGES  AGAINST  THE  WATERS  PIERCE. 

I wish  now  to  consider  two  serious  charges  which  are  made 
against  the  Waters  Pierce  Oil  company,  to  both  of  which  it 
admits,  or  should  admit,  its  guilt.  The  first  is  that  it  operated 
within  the  limits  of  a clearly  defined  territory;  the  second  is 
that  it  attempted  to  do  all  the  oil  business  in  that  territory. 
These  charges  give  rise  to  the  most  important,  interesting  and 
puzzling  issues  which  now  confront  this  nation  and  the  industrial 
world.  I am  not  going  to  make  any  specious  plea  in  defense 
of  the  Waters  Pierce.  I hold,  and  for  twenty  years  have  held, 
very  positive  and  possibly  peculiar  views  on  this  subject.  Most 
people  dissent  from  these  theories  of  mine,  but  this  unfortunate 
fact  does  not  impair  their  accuracy,  nor  shall  it  restrain  me 
from  stating  them. 

The  most  stupenduous  and  complicated  task  ever  under- 
taken by  the  law  is  the  regulation  of  the  business  affairs  of 
individuals  or  combinations  of  individuals,  and  the  most  be- 
w'ildering  of  all  problems  is  to  prescribe  by  enactments  and  court 
decisions  a system  in  w'hich  competition  shall  be  maintained 
without  any  one  getting  the  best  or  the  worst  of  it.  The  National 
government  and  every  State  in  the  Union  is  engaged  at  that 
task,  and  they  are  no  nearer  a solution  than  when  they  started. 

I have  a sublime  faith  in  the  efficacy  of  just  laws  faithfully  en- 
forced, but  law'  can  not  accomplish  the  impossible. 


QLESTIOXS  FOR  DEMOCRATS. 

It  seems  strange  to  me  that  democrats  who  subscribe 
to  the  rights  of  the  individual  against  the  government; 
who  hold  with  Jefferson  that  that  government  governs 
best  which  governs  least;  who  pretend  to  be  jealous  of 
any  interference  with  the  freedom  of  contract — it  seems 
strange  to  me  that  such  democrats  turn  squarely  about 
and  assert  that  a solution  for  our  industrial  evils  can  be 
found  in  laws  which  forbid  a man  to  buy  from  whom  he 
will,  to  sell  for  what  he  can  get;  that  this  democrat 
should  affirm  the  justice  of  laws  which  compel  a man  to 
sell  in  a place  whether  he  wishes  to  do  so  or  not,  to 
individuals  whether  he  wishes  or  not;  that  this  democrat 
believes  in  the  justice  of  a law  which  makes  it  a crime 
to  sell  goods  at  a high  figure,  and  which  makes  it  equally 
criminal  to  sell  them  at  a low  figure;  that  this  democrat 
believes  that  the  law  should  prevent  two  or  more  men 
from  fixing  a price  for  a commodity,  regardless  of  wheth- 
er or  not  the  price  agreed  on  be  fair  or  not;  that  this 
democrat  should  hold  that  the  man  who  overcomes  his 
competitor  should  be  punished,  also  that  the  man  who 
spares  his  competitor  shall  be  suspected  of  conspiracy — 
I repeat  that  this  democrat  I have  in  mind  has  discov- 
ered precepts  in  Jefferson’s  teachings  which  have  escaped 
my  notice. 

It  is  admitted  that  the  Waters  Pierce  Oil  company 
made  an  arrangement  with  the  Standard  by  which  the 
former  was  to  market  the  products  of  the  latter  within 
a certain  territory.  This  territory  included  Southeastern 
Missouri,  Arkansas,  Indian  Territory,  Oklahoma,  Texas, 
Louisiana,  west  of  the  Mississippi,  and  the  Republic  of 
Mexico.  Mr.  Pierce  has  kept  his  agreement.  The  Stand- 
ard has  violated  it  .on  innumerable  occasions,  and  I pre- 
sume that  this  perfidy  will  be  counted  to  its  credit  by 
those  who  think  that  competition  should  and  can  be 
coddled  by  the  law. 

FORCED  COMPETITION. 

In  accord  with  that  agreement  Mr.  Pierce  has  re- 
fused to  sell  oil  in  Kansas  City.  Now  suppose  we  elim- 
inate the  Standard  Oil  for  the  sake  of  argument.  Let  us 
assume  that  Mr.  Pierce  succeeds  in  purchasing  from  the 
Standard  all  of  its  holdings,  and  that  the  Waters  Pierce 
is  absolved  from  all  its  past  offenses  on  its  promise  to 
conduct  an  absolutely  independent  and  competitive  busi- 
ness. It  now  has  no  territorial  limits,  and  Kansas  City  de- 
mands that  Waters  Pierce  products  be  sold  in  that  city  in 
competition  with  other  concerns.  Very  well.  The  company 
erects  tanks,  purchases  wagons  and  horses,  installs  a com- 
prehensive delivery  system  and  competes  to  the'  best  of 
its  ability  against  the  old  established  concerns.  This  costs 
money,  and  it  is  likely  that  the  Waters  Pierce  will  lose, 
considerable  before  it  wins  a hold  on  the  Kansas  City 
trade,  but  that  city  is  so  near  the  old  line  that  suspicion 
will  be  engendered  unless  the  Waters  Pierce  invades  that 
place. 

And  then  Topeka  demands  the  competition  of  the 
Waters  Pierce.  So  does  Memphis,  just  across  the  river 
from  its  old  Arkansas  line.  What  excuse  has  the  Waters 
Pierce  to  refuse  to  serve  Memphis?  It  can  not  plead  lack 
of  money — every  one  knows  that  it  has  lots  of  money. 
Tell  me,  please,  just  where  shall  the  Waters  Pierce  be 


permitted  to  stop?  Surely  not  at  Omaha?  How  about 
Chicago  and  New  Orleans?  It  must  take  them  in  if  it 
has  the  resources.  Who  is  to  determine  if  it  can  afford 
to  enter  Chicago  and  New  Orleans,  Cincinnati  and  Louis- 
ville, Cheyenne  and  Denver?  I presume  we  would  have 
to  have  a commission  appointed  with  power  to  examine 
its  books  and  determine  whether  or  not  the  company  can 
be  forced  to  extend  its  benevolent  competition  to  any 
place  which  demands  it. 

One  of  two  things  must  happen  if  we  put  this 
scheme  'into  effect.  If  the  forced  expansion  of  the  Waters 
Pierce  be  successful  it  will  eventually  cover  the  entire 
nation — and  will  then  be  a most  vicious  form  of  trust, 
against  which  no  small  concern  could  hope  to  compete. 
On  the  other  hand  its  spreading  out  may  bankrupt  it; 
but,  of  course,  this  would  not  be  the  fault  of  the  new 
system  of  industry  we  propose  to  install. 

Have  I overdrawn  or  distorted  this  case?  Show  me 
by  what  right  a State  or  a National  government  has  the 
power  to  force  an  individual  or  a corporation  to  go  into 
a new  territory  against  its  will,  and  I will  prove  to  you 
that  either  monopoly  or  bankruptcy  is  inevitable. 

A CONCRETE  ILLUSTRATION. 

Here  is  a town  in  which  ten  rnilkmen  are  supplying 
the  inhabitants.  Each  of  these  ten  milkmen  has  cus- 
tomers in  all  parts  of  the  town.  All  of  them  travel  a 
total  of  200  miles  each  day  in  order  to  distribute  the  milk 
and  cream.  One  depraved  milkman  figures  out  that  by 
a division  of  territory  all  pf  this  milk  can  be  distributed 
by  trotting  their  horses  100  miles  instead  of  200.  They 
make  such  distribution  of  territory.  They  do  not  raise 
the  price  of  milk,  the  customers  are  served  more  prompt- 
ly, fewer  horses  are  required,  there  is  less  wear  and  tear 
on  the  wagons,  the  milkmen  have  more  leisure  or  more 
hours  for  other  employment,  not  a single  individual  in 
all  that  town  has  been  wronged  in  the  least,  the  milkmen 
have  invented  and  applied  a sensible  labor  saving  sys- 
tem— and  yet  under  the  laws  of  the  United  States  and 
of  most  of  the  individual  States  they  have  flagrantly  vio- 
lated the  anti-trust  enactments  and  are  guilty  of  a con- 
spiracy in  restraint  of  trade. 

I must  confess  little  faith  and  less  sympathy  with 
such  laws.  The  evils  which  exist  and  for  which  a cure 
is  sought  can  never  be  reached  by  such  absurd  and  un- 
scientifle  methods.  It  is  amusing  to  listen  to  men  who 
grow  eloquent  expounding  their  dread  of  the  tyrannies  of 
State  socialism  and  who  denounce  impracticabilities  of  gov- 
ernment ownership,  turn  blithely  to  a defense  of  a plan 
which  asserts  the  right  of  a government  to  stop  a man 
from  selling  what  is  his,  and  to  regulate  the  amount  of 
business  an  individual  or  a concern  shall  do  without  call- 
ing down  the  wrath  of  the  law. 

Doubtless  the  preceding  proves  that  I am  a hopeless 
visionary,  but  I shall  be  obliged  if  my  critics  will  point 
to  one  good  result  of  all  the  anti-trust  laws  which  cover 
the  pages  of  our  statute  books.  The  trust  system  is 
founded  not  on  an  industrial  conspiracy,  but  on  a tariff 
and  moneyed  conspiracy,  and  when  the  sane  thought  of 
the  nation  is  turned  to  the  abuses  which  are  tolerated  in 
Washington  and  the  banking  and  gambling  crimes  which 
are  fostered  in  Wall  street  we  shall  at  least  be  on  the 
right  scent. 


—17— 


Chapter  Vil. 

METHODS  OF  COMPETITION 


The  Waters  Pierce  Oil  company  has  twice  been 
ousted  from  Texas.  In  the  first  instance  a conviction 
was  obtained,  not  on  the  charge  that  the  Waters  Pierce 
was  a trust  or  iii'  alliance  with  a trust,  but  rather  on 
the  ground  that  it  had  been  guilty  of  certain  infractions 
of  the  anti-trust  law,  which  infractions  might  have  been 
committed  by  any  individual  or  business  concern  not  in 
any  way  identified  with  a trust.  In  the  more  recent  con- 
viction and  ousting  of  the  company  the  verdict  declared 
that  it  was  a trust.  Not  until  the  Supreme  Court  of  the 
United  States  passes  on  that  verdict  will  we  know  if  the 
jury  w'as  justified  in  rendering  it. 

It  is  the  popular  belief  that  trusts  and  monopolies 
have  been  developed  by  unfair  methods.  We  hear  much 
of  the  phrase,  “unfair  competition.”  I confess  that  I am 
unable  to  conceive  of  such  a thing  as  “fair”  competition. 
I assume  that  the  expression  “fair  competition”  means 
that  no  unfair  advantage  will  be  taken  by  any  competitor. 
The  socialist  who  dreams  of  a time  when  all  shall  serve 
the  State  for  the  pure  love  of  doing  so  may  be  lacking 
in  a clear  understanding  of  human  nature,  but  he  is  a 
practical  and  conservative  man  compared  with  the  one 
who  asserts  that  it  is  possible  to  force  men  to  compete 
“fairly.”  You  might  as  well  preach  in  favor  of  “peace- 
able” fighting.  Competition  means  that  each  participant 
will  take  every  possible  advantage  of  all  of  his  oppo- 
nents. 

COMPETITION  DEFINED. 

The  theory  of  competition  is  to  the  effect  that  a mer- 
ciless struggle  for  individual  supremacy  brings  out  all 
that  is  best  in  society.  Competition  affirms  the  justice  of 
the  law  of  the  survival  of  the  fittesf.  It  turns  down  the 
thumb  on  the  fallen  competitor,  and  places  the  laurel 
wreatli  on  the  strong  victor.  The  one  unforgivable  crime 
under  competition  is  defeat.  He  who  would  win  must 
have  good  weapons;  he  must  be  selfish,  keen,  relentless, 
insatiable.  He  must  be  instant  to  take  merciless  advantage 
of  the  mistakes  or  the  misfortunes  of  others.  You  can 
not  restrain  competition.  The  moment  you  place  a limit, 
that  moment  competition  ceases  to  exist. 

What  are  the  chief  functions  of  competition?  The 
answer  is  easy.  The  essential  functions  of  competition  are 
to  buy  in  the  cheapest  market,  to  sell  at  the  highest  price, 
to  so  perfect  a service  that  customers  will  be  attached  to 
you,  to  cripple  your  antagonist,  absorb  his  trade  and  anni- 
hilate him  if  possible — in  brief,  competition  means  victory 
for  the  strong  and  defeat  and  business  death  for  the  weak. 
It  means  the  inevitable  weeding  out  of  the  inefficient  and 
the  unfortunate  and  its  motto  for  centuries  has  been:  “All 
is  fair  in  business.” 

Invention  and  the  machine  doomed  competition.  The 
railroad  and  the  machine  annihilated  distance,  and  capi- 
tal found  it  possible  to  cover  a continent  with  its  web. 
The  worker  was  the  first  to  lose  his  independence,  the 
small  merchant  and  factory  owner  followed,  and  the  day 
of  small  undertakings  was  past.  Some  of  us  do  not  be- 
lieve this,  and  have  faith  that  a way  can  be  found  to  com- 
pel a huge  corporation  so  to  conduct  its  affairs  that  little 
fellows  will  be  permitted  to  nibble  at  and  finally  destroy  it. 

WHAT  THE  WATERS  PIERCE  DID. 

I propose  to  contrast  the  methods  of  two  typical 
American  business  concerns,  viz,,  the  original  Waters 


Pierce  Oil  company  and  Marshall  Field  & Co.,  of  Chicago. 
The  first  was  supposed  to  stand  for  all  that  was  inher- 
ently vicious  in  its  methods  of  monopolizing  business;  the 
latter  is  often  pointed  out  as  an  establishment  which  has 
attained  a remarkable  degree  of  success  by  fair  methods. 

There  is  no  dispute  that  the  Waters  Pierce  was  first 
in  the  field  in  its  present  territory.  It  Installed  a vast 
and  efficient  system  for  the  distribution  and  marketing  of 
oil,  and  was  permitted  to  occupy  the  Southwest  practic- 
ally without  trade  competition.  Then  the  Standard  bought 
into  it  and  made'the  Waters  Pierce  its  agent  for  the  mar- 
keting of  its  products.  The  complaint  is  that  the  Waters 
Pierce  would  not  permit  outsiders  to  obtain  a foothold 
in  its  territorJ^  There  is  no  doubt  that  this  complaint 
was  well-founded. 

How  did  the  Waters  Pierce  proceed  to  protect  itself 
against  those  enterprising  men  who  were  tempted  by  the 
profits  which  were  pouring  into  the  coffers  of  the  Waters 
Pierce?  In  the  first  place  .the  Waters  Pierce  had  large 
capital  back  of  it.  It  could  afford  to  lose  money  for  a 
while  in  order  to  hold  its  supremacy.  Had  a competitor 
entered  the  lists  with  an  equal  amount  of  capital  it  might 
have  been  different.  Had  a corporation  challenged  the 
Waters  Pierce  with  more  money  and  higher  executive 
genius  the  latter  probably  would  have  been  forced  out. 
That  is  the  law  of  competition. 

The  total  resources  at  the  command  of  the  Waters 
Pierce,  however,  were  insignificant  compared  with  the 
wealth  of  the  nation.  There  was  nothing  to  prevent  the 
formation  of  a company  which  could  have  fought  and  de- 
feated the  Waters  Pierce  and  the  Standard  combined,  and 
the  opportunity  is  still  open,  but  no  such  antagonist  leaped 
into  the  ring.  Little  fellows  launched  their  oil  enter- 
prises in  Texas  and  elsewhere.  What  did  the  Waters 
Pierce  do  when  confronted  with  this  competition? 

It  waged  competitive  war  on  them.  That  was  then  / 
the  recognized  rule  of  the  game.  It  cut  the  prices  to  a't 
point  at  which  there  were  not  only  no  profits  but  actual 
losses.  That  is  competition.  It  has  been  competition 
through  all  the  centuries.  I have  ridden  in  the  good  old 
days  from  Chicago  to  St.  Louis  for  25  cents  and  have 
returned  during  a railroad  rate  war  for  the  pleasing  sum 
of  10  cents.  Did  anyone  insist  at  that  time  that  such 
tactics  were  “unfair?”  No  such  charge  was  made.  It  was 
one  of  the  rules  of  the  glorious  competitive  game.  Beat 
your  foe  at  any  cost  and  the  devil  take  the  loser.  The 
man  who  entered  the  ring  with  a scant  supply  of  capi- 
tal knew  what  he  was  up  against.  He  did  not  ask  the 
government  to  interfere  with  laws  compelling  established 
concerns  to  maintain  a price  list  which  would  insure  him 
a reasonable  profit.  The  theory  was  this:  Unless  the 

little  fellow  had  the  brains  with  which  to  offset  his  lack 
of  means  he  would  lose.  He  asked  no  mercy  and  if  he 
won  extended  none. 

Mind  you,  I am  not  urging  that  this  was  right:  I am 
merely  setting  forth  the  rules  of  the  game  before  we  un- 
dertook the  “regulation  of  competition.” 

THE  PURCHASE  OF  COMPETITORS. 

Another  weapon  used  by  the  original  Waters  Pierce ^ 
was  the  outright  purchase  of  the  property  of  an  aggress- 
ive competitor.  If  there  be  one  fundamental  right  it  is 


—18— 


that  the  individual  shall  not  be  estopped  from  buying  and 
selling  in  the  open  market. 

In  defiance  of  popular  opinion  and  in  contempt  of  the 
makeshift  school  of  alleged  political  economy  which  has 
been  conjured  up  in  recent  years,  I wish  to  record  my 
belief  that  the  Waters  Pierce  had  a moral,  ethical  and 
legal  right  to  buy  anything  which  any  one  else  was  will- 
ing to  sell,  and  I will  go  further  and  declare  that  no  gov- 
ernment has  a right  to  interfere  with  any  individual  or 
combination  of  individuals  in  restraint  of  this  freedom  of 
contract. 

The  right  of  a man  to  buy  a competing  oil  company 
or  a competing  railroad  is  as  inviolate  as  that  which  per- 
mits the  enterprising  village  butcher  to  take  over  the  shop 
of  his  only  rival.  We  are  never  going  to  settle  our  in- 
dustrial problems  along  such  stupid  and  unscientific  lines. 
The  government  has  the  right  to  confiscate  property,  it 
can  assert  its  prerogative  of  regulation,  but  it  is  mon- 
strous to  urge  that  any  power  on  earth  should  intervene 
between  those  who  are  willing  to  sell  and  those  who  are 
willing  to  buy. 

It  is  also  charged  that  the  old  Waters  Pierce  made 
contracts  with  small  merchants  and  dealers  under  the^ 
terms  of  which  the  latter  agreed  to  handle  Waters  Pierce 
goods  exclusively  for  a given  period.  We  are  trying  hard 
to  convince  ourselves  that  this  was  a heinous  offense 
against  competitors,  and  that  it  is  deserving  of  severe  pun- 
ishment. Some  States  have  passed  laws  against  this  prac- 
tice. Such  laws  can  not  and  should  not  be  enforced.  They 
mean,  for  instance,  that  a jeweler  can  not  make  a contract 
with  the  Elgin  Watch  company  for  the  exclusive  handling 
of  its  products.  They  mean  that  this  jeweler  shall  be 
' forced  to  buy  and  carry  in  stock  any  watch  that  a con- 
cern may  desire  to  place  on  the  market.  As  an  oil  mer- 
chant I have  as  much  right  to  contract  with  the  Waters 
Pierce  that  I will  handle  its  products  exclusively  for  a 
term  of  years  as  my  neighbor,  the  grocer,  has  to  make  a 
deal  for  the  exclusive  handling  of  a certain  brand  of  flour, 
or  any  other  dealer  that  he  will  make  a specialty  of  a 
certain  make  of  camera. 

Such  a law  would  make  a criminal  of  the  book  agent 
who  worked  for  a designated  publishing  house.  I could 
instance  a hundred  examples  which  are  parallel,  but  it 
should  be  apparent  to  every  thinking  man  that  such  a law 
is  the  acme  of  legislative  folly.  Imagine  a grocer  being 
hauled  to  court  and  later  fined  and  imprisoned  on  con- 
viction of  having  declined  to  buy  and  carry  in  stock  a cer- 
tain brand  of  breakfast  food!  All  such  laws  prove  that  we 
do  not  know  what  ails  us,  and  that  we  are  striking  blindly 
in  the  dark  We  need  fewer  laws  and  more  thought. 

.V  PR.IISEWORTIIY  MONOPOLY. 

The  proof  of  the  inefficiency  of  all  such  laws  is  found 
in  the  fact  that  the  large  majority  of  the  great  fortunes, 
huge  business  enterprises,  trusts  and  monopolies,  have 
been  created  and  reared  by  methods  which  did  not  violate 
such  laws.  On-e  example  will  be  sufficient. 

A gene^ration  ago  there  were  twenty  or  more  wholesale 
dry  goods  houses  in  Chicago.  Today  there  are  nominally 
three  or  four;  actually  there  is  one — Marshall  Field  & 
Co.  That  great  business  concern  transacts  a volume  of 
business  so  great  that  it  completely  overshadows  all  the 
others,  and  it  is  in  a position  to  move  resistlessly  on  until 
it  obtains  a complete  monopoly  of  the  trade  of  the  West 
and  South,  and  eventually  of  the  nation.  When  Marshall 
Field  died  he  left  a fortune  which  well-informed  authori- 


ties estimate  at  not  less  than  $300,000,000,  and  so  far  as 
anti-trust  laws  are  concerned  he  made  every  penny  of  it 
honestly.  How  did  he  do  it? 

He  began  by  selling  at  a low  margin  of  profit.  He 
bought  out  his  partners  one  by  one.  He  employed  a 
high  degree  of  business  sagacity,  and  as  the  years  passed 
the  weaker  houses  succumbed  under  Ids  “fair”  competition. 
He  decided  not  to  pay  profits  to  manufacturers,  and  there- 
fore erected  his  cotton  and  linen  factories  in  England 
and  Ireland.  He  founded  his  silk  factories  in  France,  his 
looms  turned  out  carpets  in  Brussels,  thousands  of  Turks 
work  directly  for  him  in  factories  scattered  all  over  the 
sultan’s  domain;  there  was  not  a nation  in  Europe  to  which 
he  did  not  pay  taxes  for  the  huge  establishments  owned 
directly  by  him;  he  made  vast  investments  in  South  Amer- 
ica, Australia,  Japan,  China  and  from  all  the  world  the 
various  fabrics  needed  in  his  business  were  shipped  from 
his  factories  to  Chicago. 

Surely  that  was  fair  competition.  There  was  nothing 
to  prevent  any  other  wholesaler  from  adopting  the  same 
methods,  but  none  of  them  did,  the  result  being  that  Mar- 
shall Field  was  able  to  offer  all  classes  of  textiles  at  a 
rate  which  meant  fair  profits  to  him  but  ruin  to  those  who 
were  compelled  to  buy  small  quantities  in  the  open  mar- 
ket. 

I have  not  at  hand  the  recent  figures  showing  the  vol- 
ume of  business  annually  transacted  by  Marshall  Field 
& Co.,  but  I do  know  that  it  has  frequently  approached  a 
total  of  $100,000,000  a year.  A net  profit  of  5 per  cent 
would  yield  him  $5,000,00  annually,  but  the  small  com-^ 
petitor  would  face  ruin  on  a 5 per  cent  margin.  Marshall 
Field  gave  no  rebates,  he  made  no  exclusive  contracts, 
he  did  not  buy  out  his  competitors — he  crushed  him  with 
the  sheer  weight  of  $150,000,000  honestly  invested  and  hon^ 
estly  conducted — and  in  all  the  years  of  his  long  and  won- 
derful career  I never  heard  a charge  made  that  he  took  an 
unfair  or  illegal  advantage  of  a competitor.  It  was  not 
his  fault  if  other  merchants  could  not  afford  to  sell  as 
cheaply  as  he  did. 


WHAT  WILL  HAPPEN. 

Now  suppose  that  Texas  and  all  the  other  Southwest- 
ern States  succeed  in  their  attempt  to  drive  the  Waters 
Pierce  Oil  company  out  of  existence.  Assume  that  the 
National  government  succeeds  in  disrupting  the  Standard 
Oil  company,  and  assume  that  the  Supreme  Court  affirms 
the  constitutionality  of  all  the  anti-trust  laws  now  on  the 
statute  books  of  the  respective  States.  Assume  that  a way 
be  found  to  re-establish  all  the  puny  companies  which 
have  been  amalgamated  into  the  Standard,  and  assume 
that  all  of  the  former  conspirators  are  placed  in  prison 
for  life — what  then  will  be  the  situation? 

Here  we  will  have  a stupendous  industry  opened 
again  to  a law-regulated  competition.  I presume  that  no 
sane  man  proposes  to  fix  a maximum  to  the  amount  of 
money  which  an  individual  or  a corporation  can  honestly 
invest.  As  I understand  the  position  of  our  friends  who 
are  seeking  to  revive  the  corpse  of  competition,  they 
insist  that  no  commodity  shall  be  sold  below  the  cost  of 
production  and  distribution,  they  bar  rebates,  exclusive 
contracts,  the  purchase  of  competing  Concerns;  they 
propose  to  have  the  books  of  all  corporations  open  to  in- 
spection; they  propose  to  proliibit  overcapitalization  and 
to  stop  stock  speculation,  and  they  suggest  other  details 
of  lesser  importance. 


—19— 


THE  FUIERE  OF  MARSHALL  FIELD. 

Well  and  good.  This  gives  all  of  us  a “fair”  chance 
to  get  rich  in  the  oil  industry.  The  little  fellow  comes 
back  to  his  own.  No  more  spies  to  watch  his  doings,  no 
more  cutting  of  prices;  everything  is  to  be  as  prim  and 
exacting  as  the  rules  of  golf  or  of  bridge  whist. 

But  hold  on!  How  about  some  reincarnated  Marshall 
Field?  Who  shall  interfere  with  some  individual  or  law- 
fully formed  and  legally  conducted  corporation  that  en- 
ters the  clean-swept  competitive  field  equipped  with  a 
little  matter  of  $250,000,000?  Of  course,  we  will  not  per- 
mit the  new  competitor  to  buy  up  the  various  concerns 
which  are  lined  up  for  this  peaceful  scrap,  but  no  one  has 
suggested  any  law  to  prevent  such  a concern  from  creating 
a new  town  of  Whiting,  a more  extensive  and  better 
equipped  Bayonne,  a more  mammoth  Corsicana.  It  re- 
quires only  money  to  duplicate  every  mile  of  pipe  line, 
and  the  new  concern  will  not  object  to  the  law  making 
these  new  lines  common  carriers. 


The  only  advantage  that  the  new  concern  has  is  a 
trifling  matter  of  $250,000,000.  Shall  we  permit  it  to  hire 
the  best  experts?  Shall  we  permit  it  to  explore  and  de- 
velop new  fields?  Shall  we  permit  it  to  sell  its  crude  oil 
and  its  refined  products  at  a margin  of  5 per  cent  profit 
over  the  cost  of  production,  manufacturing  and  distribu- 
tion? Shall  we  permit  it  to  establish  agencies,  do  an 
interstate  business,  build  railroads,  construct  tank  ships 
and  perform  all  the  other  functions  necessary  to  the  prop- 
er conduct  of  the  oil  business?  There  are  now  no  laws 
against  such  competitive  methods. 

There  should  be  no  need  to  call  attention  to  what 
will  happen  when  such  an  honest  competitor  enters  the 
field.  The  concern  with  $100,000,  or  $1,000,000,  or  $10,- 
000,000,  or  $100,000,00,  will  have  no  more  show  against 
this  $250,000,000  corporation  or  individual  than  the  cor- 
ner retail  dry  goods  store  has  to  enter  the  wholesale  bus- 
iness against  Marshall  Field  & Co. 


Chapter  VIII. 

TEX.tS  MOVES  .tGAINST  THE  WATERS  PIERCE 


Lt  was  not  until  1889  that  the  trust  issue  engaged  the 
serious  attention  of  the  lawmakers  of  Texas.  The  Twen- 
ty-first legislature  passed,  on  March  30,  1889,  the  first  anti- 
trust law  ever  placed  on  the  statute  books  of  the  State, 
and  this  enactment  was  approved  by  the  governor  on 
April  3,  1889. 

In  recent  years  the  highest  courts  of  Texas  have 
ruled  that  so  far  as  anti-trust  violations  are  concerned, 
the  Waters  Pierce  Oil  company  or  any  other  corporation 
can  not  be  held  liable  for  any  acts  prior  to  the  passage 
of  the  law  of  1889.  Legally,  therefore,  it  had  transgressed 
no  law  through  the  methods  it  had  employed  to  build  up  a 
vast  and  wonderfully  effective  system  for  the  distribution 
and  marketing  of  its  products. 

I have  called  attention  to  this  fact  befoye,  but  reiterate 
it  for  the  purpose  of  making  it  clear  that  the  overwhelming 
advantage  later  and  at  present  enjoyed  by  the  Waters 
Pierce  was  originally  secured  in  ways  not  frowned  on  by 
public  sentiment  and  not  restrained  by  any  law.  The 
same  is  true  of  nearly  all  of  the  great  corporations  and 
huge  personal  fortunes  which  now  engage  the  serious 
thought  of  the  nation.  The  generation  which  preceded 
us  erected  no  barrier  against  wealth  massing,  and  the 
individual  or  the  corporation  was  permitted  to  grasp  all 
within  reach  free  from  State  or  National  interference. 

There  is  general  complaint  and  resentment  that  the 
Waters  Pierce  Oil  company  is  employing  every  artifice 
which  - can  be  devised  by  shrewd  lawyers  to  hold  what 
it  has  won  and  to  thwart  those  who  would  punish  it. 
Surely  we  have  no  right  to  ask  that  this  particular  cor- 
poration shall  decline  to  take  every  advantage  offered 
by  our  fearful  and  wonderful  law  code?  If  the  Waters 
Pierce  case  and  other  complicated  and  protracted  litiga- 
tion result  only  in  directing  public  attention  to  the  farci- 
cal character  of  our  system  of  jurisprudence,  they  will 
have  served  a most  admirable  purpose. 


The  passage  of  the  Texas  anti-trust  law  of  1889 
found  the  Waters  Pierce  practically  in  undisputed  pos- 
session of  the  oil  trade  of  the  Southwest.  It  undoubtedly 
could  have  held  that  advantage  had  it  yielded  strict  obe- 
dience to  all  of  the  reasonable  and  ethical  provisions  of 
that  law,  but  certain  of  its  agents  were  guilty  of  acts 
which  were  in  conflict,  not  only  with  the  law,  but  with  a 
changed  public  sentiment. 

IGAORIIVGI  THE  LAW, 

I do  not  believe  that  any  State  or  that  the  nation  will 
succeed  in  settling  this  trust  question  through  an  at- 
tempted “regulation”  of  competition  or  combinations,  but 
it  is  the  right  of  the  State  or  of  the  nation  to  try  this 
experiment,  and  the  corporation  which  defies  such  laws 
must  expect  punishment.  The  right  of  a State  to  dictate 
to  a corporation  is  unquestioned,  and  no  dictum  is  more 
firmly  established  than  that  “a  corporation  is  an  artificial 
being,  invisible,  intangible  and  existing  only  in  contem- 
plation of  the  law.  Being  a mere  creature  of  the  law,  it 
possesses  only  those  properties  which  the  character  of 
its  creation  confers  upon  it,”  so  ruled  by  the  Supreme 
Court  of  the  United  States. 

Therefore  the  right  of  Texas  to  impose  on  a cor- 
poration, organized  in  another  State  and  operating  with- 
in its  borders,  any  restriction  or  regulation  not  confisca- 
tory of  its  property,  could  not  be  challenged  with  safety. 
A careful  study  of  the  record  of  the  old  Waters  Pierce 
Oil  company  in  the  years  between  1889  and  1895  con- 
vinces me  that  it  was  slow  to  realize  that  a revolution 
had  occurred.  It  did  not  comprehend  that  the  reign  of 
unrestricted  individualism  was  at  an  end,  and  that  Texas, 
though  striking  blindly,  had  aroused  from  her  sleep  and 
had  taken  the  first  step  for  the  curbing  of  corporate  ag- 
gression. 


—20— 


I think  that  it  can  be  shown,  however,  that  the  Waters 
'Pierce  Oil  company  in  the  years  preceding  1895 — at  which 
time  it  was  called  sternly  to  account  for  its  misdeeds — 
was  a far  different  corporation  from  the  one  which  existed 
after  1900,  and  which  now  is  operating  in  all  its  former 
territory  save  that  of  Texas.  The  Waters  Pierce  is  not 
a corporate  angel,  neither  does  its  history  disclose  it  as 
the  incarnation  of  all  that  is  diabolical  and  despicable.  It 
deserves  neither  canonization  nor  crucifixion,  and  the  main 
question  at  issue  is  whether  or  not  the  penalties  which 
some  urge  should  be  imposed  upon  it  are  just,  when  all 
the  facts  are  taken  into  consideration.  A great  State 
should  not  and  will  not  lay  aside  its  dignity  and  stoop 
to  acts  inspired  by  motives  of  revenge. 

THE  ORIGIIVAL  AXTI- TRUST  LAW. 

It  will  not  be  disputed  that  the  original  -Texas  anti- 
trust law  was  framed  with  the  eyes  of  the  legislators  fixed 
more  especially  on  the  Waters  Pierce  Oil  cornpany.  This 
was  natural,  since  the  Waters  Pierce  was  the  leading 
industrial  concern  in  the  State,  and  it  was  well  understood 
that  it  then  controlled  not  less  than  98  per  cent  of  the 
oil  trade,  not  only  in  Texas  but  also  in  most  of  the  South- ^ 
west.  It  was  a matter  of  record  that  some  of  its  stock 
was  owned  by  the  Standard  Oil  company,  and  there  was 
no  question  but  that  it  raised  and  lowered  prices  prac- 
tically at  its  will.  It  granted  rebates,  made  exclusive  con- 
tracts and  harassed  its  petty  competitors  by  all  of  the 
familiar  methods  then  in  vogue. 

The  definition  of  a trust  in  the  amended  act  of  1895 
is  practically  the  same  as  that  in  the  original  act  of  1889, 
and  for  the  benefit  of  those  who  do  not  know  what  then 
constituted  and  still  constitutes  a criminal  trust  I now 
quote  the  salient  features  of  that  enactment: 

“Article  5313.  A trust  is  a combination  of  capital, 
skill  or  acts  by  which  two  or  more  persons,  firms,  cor- 
porations or  associations  of  persons,  or  either  two  or 
more  of  them  for  either,  any  or  all  of  the  following 
purposes: 

“1.  To  create  or  carry  out  restrictions  in  trade  or 
commerce  or  aids  to  commerce,  or  to  create  or  carry 
out  restrictions  in  the  full  and  free  pursuit  of  any  busi- 
ness authorized  or  permitted  by  the  laws  of  Texas. 

“2.  To  increase  or  reduce  the  price  of  merchandise, 
product  or  -commodities. 

“3.  To  prevent  competition  in  manufacture,  making 
transportation,  sale  or  purchase  of  merchandise,  product 
or  commodities,  or  to  prevent  competition  in  aids  to 
commerce. 

“4.  Fixed  at  any  standard  or  figure  whereby  its  price 
to  the  public  shall  be  in  any  manner  controlled  or  estab- 
lished, any  article  or  commodity  or  merchandise,  produce 
or  commerce  intended  for  sale,  use  or  consumption  in  this 
State. 

“5.  To  make  or  enter  into,  or  execute  or  carry  out 
any  contract,  obligation  or  agreement  of  any  kind  or 
description  by  which  they  shall  bind  or  have  bound 
themselves  not  to  sell,  dispose  of  or  transport  any  ar- 
ticle or  commodity  or  article  of  trade,  use,  merchandise, 
commerce  or  consumption  below  a common  standard 
figure;  or  by  which  they  shall  agree  in  any  manner  to 
keep  the  price  of  such  article,  commodity  or  transporta- 
tion at  a fixed  or  guarded  figure;  or  by  which  they  shall 
in  any  manner  establish  or  settle  the  price  of  any  article 
or  commodity  or  transportation  between  them  or  them- 
selves and  others  to  preclude  a free  and  unrestricted  com- 
petition among  themselves  or  others  in  the  sale  or  trans- 


portation of  any  such  article  or  commodity,  or  by  which 
they  .shall  agree  to  pool,  combine  or  unite  any  interest 
they  may  have  in  connection  with  the  sale  or  transporta- 
tion of  any  such  article  or  commodity  that  its  price  might 
in  any  way  be  affected.” 

THE  INADEQUACY  OF  WORDS. 

In  a current  novel  Booth  Tarkington  makes  one  of 
his  characters  say:  “It  was  my  innocent  conception 

that  alm.ost  anything  might  be  so  described  in  words  that 
those  who  read  might  inevitably  perceive  the  thing  pre- 
cisely. If  this  were  true,  there  would  be  little  work  for 
the  lawyers,  who  produce  such  tortured  pages  in  the 
struggle  to  be  definite,  who  swing  riches  from  one  family 
to  another,  save  men  from  violent  death  or  send  them  to 
it,  and  earn  fortunes  for  themselves  through  the  danger- 
ous inadequacies  of  words.” 

Let  us  read  that  trust  definition  over  again.  If  words 
mean  anything,  it  is  difficult  to  go  astray  in  the  matter 
of  what  constitutes  a Texas  trust.  It  certainly  means 
that  two  or  more  men  or  concerns  can  not  sell  things 
at  too  low  a price;  that  they  can  not  sell  things  at  too 
high  a price,  and  finally  that  they  can  not  fix  any  price, 
be  it  high  or  low,  fair  or  unfair,  honest  or  dishonest.  It 
means  that  these  two  men,  concerns,  etc.,  can  not  go  for- 
ward, backwTard  or  stand  still.  It  means  that  co-operation 
or  combination  of  any  kind  or  description  is  criminal.  It 
means  that  the  only  way  in  which  the  anti-trust  law  can 
be  evaded  is  for  each  individual  to  go  it  alone. 

The  plain  construction  and  rigid  enforcement  of 
such  a law  would  make  criminals  of  90  per  cent  of  the 
business  men  of  Texas  or  any  other  State,  and  its  con- 
tinued obedience  would  bring  about  a return  to  the  prim- 
itive barbarism  of  which  the  cave  man  was  the  first  known 
type.  No  such  law  should  ever  be  passed.  The  obvious 
certainty  of  its  general  non-enforcement  places  too  much 
discretionary  power  in  the  hands  of  the  prosecuting  law 
officials.  It  is  sure  to  be  ignored  when  violated  by  small 
merchants  and  manufacturers — and  no  business  man  ever 
has,  ever  will  or  possibly  could  conform  to  its  plain  terms. 
It  therefore  becomes  a weapon  which  the  law  can  use  or 
withhold.  It  makes  of  the  prosecuting  official  an  in- 
spector, an  industrial  czar,  and  it  tempts  business  con- 
cerns to  transgress  to  the  greatest  extent  compatible  with 
immunity,  none  of  them  knowing  just  what  or  why  the 
law  will  be  enforced  against  them. 

A SWEEPING  RESTRICTION. 

Read  again  that  second  clause  which  makes  it'  a 
crime  for  two  or  more  individuals  or  a corporation  “to 
increase  or  reduce  the  price  of  merchandise,  product  or 
commodities.”  Shades  of  .Adam  Smith,  John  Stuart  Mill 
and  Thomas  Jefferson!  How  can  there  be  competition 
if  one  is  forbidden  to  lower  prices?  There  is  no  reserva- 
tion made  in  this  clause,  and  in  the  fifth  clause  there  is 
a positive  injunctian  against  establishing  a standard  price, 
be  that  price  fair  or  unfair.  This  would  make  it  illegal 
to  manufacture  a brand  of  cigars  and  sell  them  at  a fixed 
price  of  five  or  ten  cents  each.  It  is  not  necessary  to 
point  out  the  innumerable  and  manifest  absurdities  sug- 
gested by  a study  of  this  definition  of  a trust.  It  is  an 
indictment  not  against  combinations,  but  a sweeping  de- 
nunciation of  the  only  competitive  methods  known  by 
which  business  can  be  transacted  in  a civilized  commu- 
nity. 

Had  the  Waters  Pierce  or  any  other  corporation 
deemed  it  best  to  bow  to  the  plain  terms  of  that  law 


the  first  step  would  have  been  to  dissolve  and  withdraw 
from  the  State,  but  no  one  took  the  enactment  seriously, 
not  even  the  officials  charged  with  its  enforcement.  The 
motive  of  its  passage  was  to  “throw  a scare  into  the  cor- 
porations,” and  any  such  legislative  policy  deserves  severe 
criticism.  L,aws  should  be  enforced  without  favor  or 
repealed. 

The  law  was  approved  on  April  3,  1889,  and  a per- 
mit was  granted  to  the  Waters  Pierce  Oil  company  to 
operate  in  Texas  on  July  6 of  the  same  year.  The  com- 
pany was  organized  in  Missouri  and,  so  far  as  Texas  was 
concerned,  was  a foreign  corporation,  having  only  such 
rights  and  immunities  as  Texas  chose  to  concede.  By 
accepting  a permit  the  company  tacitly  and  specifically 
agreed  to  obey  the  laws  of  the  State. 

MAdiMTUDE  OF  THE  ISSUE. 

I have  neither  the  space  nor  the  inclination  to  enter 
into  a prolonged  consideration  of  the  litigation  which 
marked  the  years  between  1895  and  1900,  but  1 shall 
attempt  to  note  those  legal  incidents  and  developments 
which  have  a bearing  on  the  issues  now  pending.  Bear 
in  mind  that  we  were  then  in  our  infancy  in  the  struggle 
to  curb  and  regulate  corporations,  and  it  is  not  to  be 
wondered  at  that  mistakes  were  made  on  both  sides, 
and  that  passion  and  selfishness  contended  for  the  advan- 
tage. We  are  yet  in  the  primary  grade  in  this  school  of  in- 
dustrial economy,  and  my  reason  for  considering  this 
Waters  Pierce  case  at  such  length  is  that  it  contains  to 
a remarkable  degree  the  developments,  motives  and  point- 
ed object  lessons  which  should  inable  us  to  move  toward 
a rational  solution  of  the  greatest  problem  which  ever 
has  confronted  civilization. 

FIRST  sun  AGAIISST  THE  WATERS  PIERCE. 

On  November  21,  1894,  the  grand  jury  of  McLennan 
county  preferred  an  indictment  against  John  D.  Rocke- 
feller, Henry  M.  Flagler,  William  Rockefeller,  John  D. 
Archbold,  Benjamin  Brewster,  Henry  H.  Rogers,  Wesley 
M.  Tilford,  Henry  Clay  Pierce,  Arthur  M.  Finlay,  C.  M. 
Adams,  John  P.  Gruet,  E.  Wells,  William  Grice,  E.  T. 
Flathaway  and  F.  A.  Austin,  charging  them  with  a con- 
spiracy with  William  E.  Hawkins.  The  latter  was  then 
the  local  agent  of  the  Waters  Pierce  in  Waco,  and  sudden- 
ly found  himself  in  the  limelight.  Wells,  Grice,  Flathaway 
and  Austin  were  division  agents  of  the  Waters  Pierce. 
The  charge  was  made  that  the  Waters  Pierce  was  con- 
trolled by  the  Standard  Oil  company,  and  that  it  was  en- 
gaged in  a conspiracy  in  restraint  of  trade  in  violation 
of  the  anti-trust  law  of  1889. 

The  defense  moved  for  a severance,  which  was  grant- 
ed, and  elected  to  try  E.  T.  Hathaway,  one  of  its  divis- 
ion agents.  Rockefeller  and  the  other  Standard  Oil  mag- 
nates were  not  within  the  reach  of  the  court,  and  Mr. 
Pierce  resisted  extradition.  Later  he  came  to  Texas  and 
voluntarily  surrendered  himself,  as  will  be  told. 

The  testimony  introduced  in  this  trial  of  Hathaway 


was  to  the  effect  that  the  Waters  Pierce  Oil  company 
had  been  making  exclusive  contracts,  giving  rebates,  thair 
it  had  reduced  prices  for  the  purpose  of  suppressing  com- 
petition, that  on  the  wiping  out  of  such  competition  it  had 
radically  raised  prices  for  the  purpose  of  recouping  its 
losses,  and,  in  brief,  that  it  had  indulged  in  all  of  the 
familiar  methods  by  which  a monopoly  is  presumed  to 
sustain  itself.  The  fact  that  the  Standard  Oil  owned  a 
portion  of  its  stock  was  brought  out,  and  the  plea  was 
offered  that  this  made  it  a trust.  It  was  also  established 
that  the  company  had  purchased  the  Eagle  refinery  and 
other  competing  concerns. 

OTHER  SIDE  OF  THE  CASE. 

It  is  true  that  the  officers  of  the  Waters  Pierce,  like 
the  managers  of  corporations  generally,  did  not  believe 
that  the  Texas  anti-trust  law  of  1889  was  valid  or  en- 
forcible.  Nevertheless  they  made  an  honest  attempt  to 
comply  with  its  terms.  They  did  not  cease  to  give 
rebates  to  secure  or  retain  customers,  nor  to  raise  or 
lower  prices  for  increasing  profits  and  overcoming  com- 
petition, nor  to  buy  out  competitors  and  resort  to  other 
methods  then  generally  in  vogue  to  secure  and  hold 
trade,  but  none  of  these  acts  were  contrary  to  law  nor 
prohibited  by  the  Act  of  1889  so  their  lawyers  argued. 

W’hat  the  Act  did  prohibit  were  agreements  or  com- 
binations for  the  purpose  of  fixing  and  controlling  prices 
and  limiting  the  production  of  commodities.  The  latter 
prohibition  did  not  affect  the  Waters  Pierce  Oil  com- 
pany, because  it  was  not  a producer  or  refiner  in  Texas, 
but  the  company  did  make  a diligent  effort  to  have  its 
agents  conform  to  the  statute  against  the  fixing  of 
prices. 

While  there  was  a large  mass  of  testimony  offered 
in  the  Hathaway  case  and  in  the  main  ouster  suit  relative 
to  the  giving  of  rebates,  raising  and  lowering  of  prices, 
etc.,  it  really  was  not  pertinent  to  the  issues  in  the 
case.  There  was  evidence  of  only  six  or  eight  agreed 
ments  fixing  prices  in  the  entire  State  of  Texas  during 
the  four  or  five  years  following  the  adoption  of  the 
Act  of  1889,  and  it  was  also  shown  that  these  prohibited 
transactions  were  never  authorized  by  controlling  officers 
of  the  company,  but  it  was  on  these  infractions  alone 
that  the  Waters  Pierce  was  convicted  in  the  ouster/ 
case.  . * 

Hathaway  was  convicted  and  fined  $50.  This  was  a 
felony  which  at  that  time  was  nonbailable,  and  Hatha- 
way, acting  on  the  advice  of  his  lawyers,  appealed  and 
was  sent  to  jail.  The  Waters  Pierce  proposed  to  make 
a test  case  of  this,  and  Hathaway  became  the  first 
Texas  martyr  in  the  cause  of  corporations.  He  re- 
mained in  the  Waco  jail  nearly  a year,  and,  since  he  was 
well  treated  and  liberally  paid  by  the  Waters  Pierce  Oil 
company,  he  wore  his  crown  of  martyrdom  easily.  In 
the  autumn  of  1896  a higher  court  reversed  the  verdict 
against  Hathaway  and  he  was  released  with  his  rights 
as  a citizen  unimpaired. 


—22— 


Chapter  IX. 


WHY  THE  COMPANY  W.\S  FIRST  OUSTED  FROM  T’EXAS 


The  first  suit  against  the  original  Waters  Pierce  Oil 
company,  resulted,  as  we  have  seen,  in  the  conviction, 
imprisonment  and  subsequent  voluntary  discharge  of  E. 
T.  Hathawa3%  one  of  the  division  managers  of  the  com- 
pan3'  in  Texas.  It  tvas  also  productive  of  harm- 
less indictments  against  other  managers  and  officers  of 
the  compan3',  and  a drag-net  was  ineffectually  thrown 
out  for  the  Rockefellers  and  other  Standard  Oil  mag- 
nates. These  persons  were  not  seriously  menaced  or 
much  anno3'ed  thereb3',  but  the  most  important  conse- 
quence of  this  initial  litigation  was  the  discovery  that 
there  was  mone3’  to  be  made  and  political  advantages  fo 
be  gained  by  the  prosecution  and  persecution  of  the 
Waters  Pierce  Oil  company. 

From  the  filing  of  this  first  suit  until  the  present 
time  this  corporation  has  been  made  the  foot-ball  of^ 
aspiring  and  more  or  less  ambitious  lawyers  and  poli- 
ticians. It  is  true  that  the  original  Waters  Pierce  Oil 
compan3'  committed  certain  violations  of  the  law,  for 
which  it  received  punishment,  but  it  merely  followed  the 
then  prevailing  business  methods,  and  the  punishment  in- 
flicted was  greatly  disproportionate  to  the  offense.  The 
fact  that  other  corporations  have  been  clearly  more 
guilt3'  cannot  legally  be  pleaded  in  its  defense,  nor  can 
the  fact  that  these  other  recreant  corporations  have 
escaped  punishment  have  weight  in  any  properly  con- 
stituted law  court,  but  it  was  the  peculiar  misfortune 
of  the  two  Waters  Pierce  Oil  companies — particularly 
the  present  one — that  their  name  became  associated  in 
the  public  mind  with  that  of  the  Standard  Oil  com- 
pan3’.  and  for  that  “crime'’  they  have  been  booted  from 
court  to  court,  and  have  been  dmounced  and  misrep- 
resented on  the  stump  by  certain  lawyer  politicians  who 
would  eagerl3'  have  accepted  a retainer  from  either  cor- 
poration. 

I have  carefully  studied  the  printed  evidence  for 
and  against  the  two  Waters  Pierce  Oil  companies,  and  be- 
lieve I have  sufficient  intelligence  properly  to  weigh  that 
evidence  and  to  arrive  at  a reasonable  estimate  of  their 
corporative  guilt.  A careful  study  of  this  case  convinces 
me  that  were  there  direeted  against  the  railroads,  banks, 
manufactories,  corporations  and  business  concerns  of  all 
kinds  in  the  United  States  a campaign  such  as  has  been 
waged  against  the  Waters  Pierce,  that  hardly  a man  of 
financial  or  moral  standing  would  escape  untarnished,  and 
that  our  filled  prisons  would  outnumber  our  churches. 

If  penalties  equal  to’  those  which  have  be;n  as- 
sessed against  the  present  Waters  Pierce  Oil  company 
were  inflicted  on  productive  wealth  proportionally  guilty, 
we  should  arrive  at  State  socialism  through  cbnfiscation, 
and  our  only  millionaires  would  be  those  prosecuting 
officials  who  had  attained  fabulous  fortunes  as  commis- 
sions for  their  services  in  levying  fines  against  the  crim- 
inal corporations. 

THE  .SCAADAL  OF  COMMISSIOXS. 

The  original  Texas  anti-trust  law  of  1889  contained 
a clause  fixing  the  penalties  at  a minimum  of  $50  and  a 
maximum  of  $500  a day,  each  day  to  constitute  a sepa- 
rate violation  of  the  law,  and  another  clause  contained 


a provision  to  the  effect  that  the  county  attorney  bring- 
ing the  suit  should  receive  a commission  of  25  per  cent 
of  all  fines  assessed  and  collected  against  a trust  or 
other  violator.  A subsequent  law  reduced  this  com- 
mission to  10  per  cent,  but  through  some  legal  sub- 

terfuge it  is  generally  held  by  the  official  prosecutors 
that  the  25  per  cent  can  be  collected — and  they  need  the 
money. 

It  makes  little  difference  what  the  percentage  of 

the  commission  may  be,  the  proposition  that  a prose- 
cuting official  shall  be  spurred  on  to  his  duty  by  a 

special  money  reward  is  absolutely  indefensible,  and  the 
concrete  result  has  been  to  bring  about  a train  of  abuses 
and  scandals  which  will  shock  Texas  when  the  facts  are 
known.  There  may  be  possible  justification  for  the  fin- 
ing of  the  Waters  Pierce  or  other  corporation  some 
such  sum  as  $1,600,000,  but  what  fair  man  will  assert 
that  the  official  who  brought  the  suit  should  receive  a 
reward  of  more  than  $400,000,  or  that  he  should  be  priv- 
ileged to  divide  this  princely  sum  between  himself  and 
other  officials  and  the  star  witness?  This  is  the  legaliza- 
tion of  bribery;  this  sets  the  seal  of  approval  on  the  sub- 
ornation of  testimony,  and  its  inevitable  effect  is  to 
stimulate  persecutions  and  to  incite  perjury. 

A GLARING  EXAMPLE. 

The  outcome  of  the  first  penalty  suit  against  the 
original  Waters  Pierce  Oil  company  should  have  brought 
about  the  repeal  of  that  iniquitous  feature  of  the  law. 
This  suit  was  begun  in  Waco  on  April  1,  1895.  The 
story  of  its  inception  was  interestingly  told  by  Con- 
gressman R.  L.  Henry  while  on  the  stand  before  the 
recent  Bailey  investigating  committee.  The  indictment 
against  Hathaway  and  the  other  managers  and  officers 
of  the  company  was  pending  in  1895,  but  was  not  for 
money  penalties.  Mr.  Henry  was  familiar  with  this 
litigation.  He  was  serving  as  assistant  attorney  general 
under  Governor  Hogg  when  the  indictments  were  pre- 
ferred against  Rockefeller,  Pierce,  Hathaway  and  other 
Waters  Pierce  officials  and  agents,  but  Mr.  Henry  re- 
signed and  resumed  his  law  practice,  locating  in  Waco 
and  entering  into  partnership  with  O.  L.  Stribling.  I 
quote  from  his  testimony  given  in  the  Bailey  investiga- 
tion; 

“Mr.  J.  W.  Taylor  was  the  county  attorney  of  Mc- 
Lennan county  at  that  time.  I called  his  attention  to 
the  section  of  the  anti-trust  law  authorizing  penalties 
at  the  rate  of  $50  a day  and  asked  him  if  he  did  not  de-. 
sire  to  bring  suit  against  the  Waters  Pierce.  He  said 
he  did,  and  stated  that  he  would  turn  tlie  matter  over 
to  my  firm  if  we  wanted  to  bring  the  suit  and  we  would 
divide  the  fees.  He  entered  into  an  oral  agreement  that 
the  firm  of  Henry  & Stribling  was  to  have  two-thirds 
of  whatever  commission  the  statutes  allowed,  and  Mr. 
Taylor  was  to  have  one-third.  1 drew  the  petition  my- 
self for  our  firm  and  filed  it  some  time  in  April,  1895. 
It  was  for  $109,500,  the  penalties  at  that  time  accruing 
amounting  to  that  much  at  the  rate  of  $50  a day.  We 
brought  the  suit.  We  took  depositions  amounting  to 
lumdreds  and  hundreds  of  pages,  etc.” 


—23— 


DIVIDING  THE  SPOILS. 

In  other  words  there  were  in  sight  commissions  of 
S27,375,  of  which  the  private  j law  firm  of  Henry  & 
Stribling  stood  to  win  $18,250,  and  the  public  prose- 
cutor $9,125.  Assuming  that  the  Waters  Pierce  deserved 
punishment — and  it  was  doubtless  far  from  guiltless  in 
its  operations  at  that  period  of  its  existence — why  should 
so  tempting  a bait  be  cast  into  the  legal  waters?  It  in- 
cited, not  a calm  and  justice-seeking  prosecution,  but  a 
frantic  attempt  to  secure  a conviction  which  should  pay 
dividends  to  the  speculators  who  dragged  the  country 
for  the  “hundreds  and  hundreds  of  pages”  of  depositions, 
most  of  which  were  pointless  and  worthless. 

The  indictment  against  Hathaway  and  others,  in- 
cluding Henry  Clay  Tierce,  was  procured  in  Waco  about 
the  same  time,  and  evidently  in  aid  of  that  penalty  suit, 
because  it  is  a well  known  fact  that  Mr.  Henry  pre- 
pared that  indictment  and  consulted  with  Mr.  Taylor, 
the  county  attorney,  regarding  the  same,  and  during 
the  trial  of  Hathaway.  The  penalty  suit,  however,  was 
never  tried  on  its  merits,  but  became  complicated  with 
and  later  overshadowed  by  the  ouster  case  brought  in 
Travis  county  in  1897.  I will  anticipate  by  saying  that 
this  latter  case  was  one  brought  by  the  State,  and  by 
which  the  Waters  Pierce  was  expelled  from  Texas. 

In  1900  a permit  was  granted  to  the  present  Waters 
Pierce  Oil  company  empowering  it  to  do  business  in 
Texas,  and  Mr.  Pierce  went  to  Waco  for  the  purpose 
of  trying  to  make  a settlement  of  the  still  pending  pen- 
alty suit,  and  to  dispose  of  the  indictment  against  him- 
self and  others.  It  was  the  consensus  of  legal  opinion 

that  the  granting  of  a permit  to  the  present  company 
destroj'ed  any  chance  for  the  State  to  collect  the  fine, 
or  to  secure  a criminal  conviction,  but  Mr.  Pierce  wished 
to  start  clean  and  to  avoid  any  chance  for  compli- 

cation and  was,  therefore,  eager  to  make  a fair  settle- 
ment. 

In  the  meantime  Mr.  Cullen  F.  Thomas  had  become 
county  attorney  of  McLennan  county,  and  had  inherited 
the  case  and  a chance  for  a portion  of  the  possible 

fees.  He  became  involved  in  a dispute  with  Henry  & 
Stribling  over  the  proportion  of  the  commission  which 
each  should  receive  in  the  event  a compromise  was 
made  with  Mr.  Pierce.  A conference  was  held  in  Waco, 
at  which  Judge  Scott — the  trial  judge  before  whom  the 
penalty  suit  was  still  pending — Thomas,  Henry,  Pierce 
and  others  were  present.  Mr.  Pierce  stated  that  he 
was  willing  to  pay  $13,000  and  have  that  case  settled, 
it  being  understood  that  Flenry  & Stribling  and  Thom- 
as were  to  divide  $3000  of  this  for  their  fees  or  com- 
mission, and  that  the  remaining  $10,000  should  go  to  the 
State  of  Texas.  Judge  Scott  did  not  object  to  this. 
County  Attorney  Thomas  insisted  that  Mr.  Pierce  should 
pay  $25,000.  There  is  a disagreement  concerning  just 
what  was  said  at  this  and  future  conferences,  but 
there  is  no  manner  of  doubt  that  the  failure  to  come 
to  an  understanding  was  due  to  the  fact  that  each  of 
the  various  prosecutors  wanted  more  than  the  others 
would  allow,  the  result  being  that  no  compromise  was 
made. 

POOR  OLD  TEXAS. 

No  one  seemed  to  care  much  what  poor  old  Texas 
got  out  of  the  attempted  compromise.  Read  any  of  the 
various  accounts  of  these  negotiations  and  you  will  be 
impressed  with  the  inherent  viciousness  of  a system 
which  places  a money  reward  on  the  prosecution  of  cor- 
porations or  of  any  other  violators  of  the  law.  Finding 


it  impossible  to  settle  with  the  various  claimants,  and 
feeling  assured  that  the  higher  courts  would  finally  rule 
in  his  favor,  Mr.  Pierce  abandoned  tbe  attempt  and 
let  matters  take  their  course.  The  courts  vindicated  the 
accuracy  of  his  judgment  by  dismissing  the  case  two 
years  later.  Therefore  the  State  did  not  receive  a 
dollar,  and,  so  far  as  I know,  no  one  else  has  taken  the 
trouble  to  ascertain  how  much  Texas  lost  by  being 
made  a party  to  this  attempt  to  fatten  the  purses  of 
private  attorneys  and  public  prosecutors  at  the  expense 
of  an  unpopular  corporation. 

As  I have  stated  before,  this  initial  performance 
should  have  brought  about  a reform  in  the  law,  but 
it  was  decreed  that  the  vicious  commission  clause 
should  remain,  and  that  time  should  breed  a far  greater 
scandal.  An  honest  and  zealous  prosecuting  official 
needs  no  such  money  stimulus.  If  a community  can 
not  afford  to  pay  the  legitimate  expenses  of  bringing 
alleged  law-breaking  corporations  to  justice,  it  should 
be  willing  to  suffer  rather  than  to  sacrifice  its  dignity  by 
inciting  speculating  shysters  to  make  the  attack  on  the 
promise  of  a division  of  the  loot. 

The  case  previously  discussed  is  of  slight  import- 
ance compared  with  the  one  which  was  filed  on  May 
12,  1897,  in  the  district  court  of  Travis  county  by  M. 
M.  Crane,  then  attorney  general  of  Texas.  The  prime 
object  of  this  suit  was  to  cancel  the  permit  of  the  old 
Waters  Pierce  Oil  company  and  to  oust  it  from  the 
State.  Incidentally  there  were  criminal  ^indictments 
against  E.  T.  Hathaway,  William  Grice,  F.  A.  Austin, 
J.  W.  Keenan  and  Lewis  Fries — the  five  division  agents 
of  the  company — but  this  was  a minor  matter,  and  in 
the  end  these  men  were  acquitted. 

In  all  of  the  suits  against  the  Waters  Pierce  much 
of  the  same  testimony  has  been  used.  The  most  com- 
promising evidence  deduced  in  the  great  trial  of  a year 
ago  was  first  employed  in  the  cases  of  1895-7,  and  the 
most  effective  plea  now  made  by  the  company  is  that  its 
record  since  that  time  has  been  clear,  and  that  an  attempt 
is  being  made  to  punish  the  present  company  for  the 
sins  of  a corporation  which  legally  died  in  1900,  and  for 
practices  which  the  existing  concern  neither  imitates, 
tolerates  or  can  be  held  responsible  for.  We  will  con- 
sider that  plea  later. 

A FAMOUS  CASE. 

The  complaint  in  the  forfeiture  case  in  1897  charged 
that  the  Waters  Pierce  Oil  company  was  a conspiracy  in 
restraint  of  trade  in  violation  of  the  Texas  anti-trust 
laws  of  1889  and  1895;  that  it  had  entered  into  a contract 
with  and  had  become  a member  of  the  Standard  Oil 
company  under  the  trust  agreement  of  1882;  that  it  had 
bought  out  the  business  and  good  will  of  the  Eagle  Re- 
fining company  and  other  concerns  which  had  been  com- 
peting with  it;  that  it  had  made  exclusive  contracts  with 
merchants  who  handled  its  goods,  also  that  it  had  granted 
rebates  to  such  retailers  and  jobbers  and,  in  general,  that 
its  general  policy  was  to  destroy  competition  and  to 
maintain  a monopoly  of  oil  and  its  products  in  Texas. 

This  famous  case  was  a jury  trial  before  Judge  R.  E. 
Brooks,  one  of  the  ablest  jurists  of  Texas.  It  resulted 
in  the  cancellation  of  the  company’s  permit  and  its  oust- 
ing from  Texas.  The  suit  was  carried  to  the  court  of 
civil  appeals,  and  the  judgment  of  the  lower  court  af- 
firmed. A writ  of  error  was  denied  by  the  Supreme 
Court  of  Texas,  but  the  case  finally  came  before  the 
Supreme  Court  of  the  United  States  for  review,  with  the 


—24— 


result  that  the  judgments  were  affirmed  on  March  19, 
1900,  which  verdict  denied  the  company  a right  to  trans- 
act any  save  interstate  business  in  Texas. 

There  is  more  misunderstanding  and  misconception 
over  the  issues  involved  in  this  case  than  would  seem 
possible,  considering  the  fact  that  its  history  is  spread 
on  easily  obtainable  court  records.  I have  searched  for 
the  essential  facts  in  many  famous  cases  during  my  writ- 
ing career,  and  am  aware  that  newspaper  reporters  and 
political  orators  are  likely  to  make  mistakes,  but  never 
before  have  I examined  such  a mass  of  non-facts — to 
coin  a gentle  noun — as  are  disclosed  in  this  one. 

DELUDING  THE  PUBLIC. 

It  has  repeatedly  been  stated,  by  men  who  must  have 
known  different,  that  the  original  Waters  Pierce  Oil  com- 
pany was  ousted  from  Texas  because  it  was  a trust,  and  it 
has  been  reiterated  or  inferred  a thousand  times  that 
this  penalty  was  affirmed  by  the  various  courts,  includ- 
ing the  highest  court  in  the  land,  because  of  proof  that 
the  Waters  Pierce  was  a part  of  the  Standard  Oil  com- 
pany. I now  ask  the  reader  of  this  paragraph  if  this 
is  not  the  impression  he  has  gathered  from  what  has 
been  said  and  written  on  this  subject?  Have  you  not 
been  led  to"  believe  that  the  Waters  Pierce  was  expelled 
from  Texas  because  it  was  a trust  in  affiliation  with  the 
Standard  Oil  company?  Is  it  not  your  impression  that 
it  was  convicted  for  cutting  prices  for  the  purpose  of 
breaking  down  competition;  also  of  entering  into  agree- 
ments with  competing  concerns  or  of  buying  them  out — ■ 
all  for  the  purpose  of  holding  a trade  advantage?  That 
was  my  impression  on  the  start  and  it  is  still  the  im- 
pression of  most  men  who  have  attempted  to  keep  in- 
telligent track  of  this  famous  case. 

There  is  not  one  particle  of  truth  as  a basis  for  any 
such  impression. 

The  Standard  Oil  agreement  of  1882  was  submitted  in 
the  Travis  county  ouster  case  of  1897 — the  one  I am 
discussing — and  it  was  well  established  that  the  Standard 
owned  a part  of  its  stock.  There  was  a huge  mass  of 
testimony  to  prove  that  the  Waters  Pierce  had  cut  prices 
below  a normal  standard  for  the  purpose  of  meeting  or 
downing  competition.  It  was  proved  and  admitted  that 
it  had  purchased  the  Eagle  Refining  company  and  other 
competing  plants,  and  there  was  plenty  of  testimony 
to  the  effect  that  it  had  spared  no  effort  to  control  the 
largest  possible  amount  of  the  oil  business  in  Texas. 
I shall  not  go  into  the  details  of  this  testimony,  but  it 
is  sufficient  to  state  that  the  facts  presented  disclosed 
a system  of  trading  which  the  competitors  of  the  Waters 
Pierce  admit  that  it  no  longer  follows,  but — and  this  is 
the  point  which  should  be  kept  in  mind — it  abandoned 
these  practices  voluntarily,  and  not  because  of  its  con- 
viction before  Judge  P>rooks  in  1897,  or  because  of  the 
mandate  of  the  United  States  Supreme  Court  in  1900. 

LETTING  IN  SOME  LIGHT. 

Read  closely  what  follows,  and  you  will  ascertain 
that  you  have  been  misled  concerning  the  issues  which 
resulted  in  the  ousting  of  the  old  Waters  Pierce  Oil 
company  from  Texas.  After  listening  to  all  the  testi- 
mony and  hearing  all  the  arguments.  Judge  Brooks  de- 
livered his  charge  to  the  jury.  I take  the  liberty  of 
eliminating  some  of  the  legal  phrases  and  of  making  the 
text  clearer  to  the  lay  reader,  but  have  preserved  its 
exact  sense.  Thus  freely  translated,  the  sixteenth  clause 
of  his  charge  to  the  jury  reads  as  follows: 


“There  has  been  certain  evidence  introduced  before 
you  tending  to  show  inducements  offered  by  agents  of 
the  Waters  Pierce  Oil  company  to  parties  to  handle  its 
oils  exclusively,  and  tending  to  show  refusal  of  its 
agents  to  sell  to  parties  handling  other  than  their  oil,  also 
discriminations  in  prices  against  parties  handling  other 
than  their  oils,  also  of  the  cutting  of  prices  by  the  Wa- 
ters Pierce  for  the  purpose  of  breaking  down  competi- 
tion. None  of  these  things  are  unlawful,  and  the  testi- 
mony concerning  them  was  admitted  only  as  bearing  on 
the  question  of  whether  or  not  the  Waters  Pierce  has, 
since  July  6,  1889,  granted  any  rebates  or  other  valuable 
consideration  for  the  exclusive  handling  of  its  products.’’ 

Was  that  your  understanding  of  the  ruling  of  the 
court  in  the  case  which  resulted  in  the  first  expulsion 
of  the  first  Waters  Pierce  Oil  company  from  Texas? 
That  charge  by  Judge  Brooks  eliminated  from  consid- 
eration the  vast  bulk  of  the  testimony  which  was  and  still 
is  popularly  deemed  most  criminating.  It  refused  to  crim- 
inate the  Waters  Pierce  for  employing  competitive  meth- 
ods which  had  been  used  for  centuries,  and  which  will 
continue  to  be  used  so  long  as  there  is  such  an  institution 
as  competition.  I can  not  reconcile  Judge  Brooks’  ruling 
with  the  spirit  of  the  Texas  anti-trust  law,  which  won- 
derful enactment  makes  it  a crime  to  raise,  lower  or  fix 
the  price  of  a commodity,  but  presume  that  the  jurist 
held  that  it  is  beyond  the  province  of  a law  absolutely  to 
prohibit  the  transaction  of  business. 

CONCERNING  THE  STANDARD  OIL. 

Those  who  believe  that  the  Waters  Pierce  was  ex- 
pelled from  Texas  because  the  Standard  Oil  company 
had  acquired,  by  hook  or  crook,  a majority  of  its  stock, 
will  be  interested  in  reading  Judge  Brooks’  charge  to 
the  jury  on  that  feature  of  the  case.  I quote  it  exactly 
as  he  delivered  it: 

“There  has  been  introduced  in  evidence  before  you 
a certain  contract,  known  as  the  ‘Standard  Oil  trust 
agreement,’  and  certain  evidence  tending  to  show  that 
the  defendant  Waters  Pierce  Oil  company  became  a mem- 
ber of  and  entered  into  said  agreement.  You  are  instruct- 
ed that  the  evidence  is  not  sufficient  to  show  that  the  de- 
fendant became  a member  of  said  organization,  if  at  all, 
in  a manner  that  violates  the  trust  laws  of  this  State, 
and  you  will  therefore  disregard  all  testimony  upon  this 
branch  of  the  case.” 

Does  this  indicate  that  the  Waters  Pierce  was  ousted 
from  Texas  in  1900  because  it  had  been  convicted  of  be- 
ing an  integral  part  of  the  Standard  Oil  company?  How 
many  times  have  you  been  assured  that  this  was  its  crime? 
And  yet,  the  relations  which  exist  today  between  the  Wa- 
ters Pierce  and  the  Standard  are  practically  the  same-  as 
they  were  when  Judge  Brooks  ruled  that  the  former  was 
not  a part  of  the  oil  trust. 

BUYING  COMPETITORS  NOT  A CRIME. 

A great  effort  was  made  to  convict  the  company  for 
the  alleged  crime  of  buying  competing  companies.  Here 
is  the  instruction  given  by*  Judge  Brooks  pn  this  point: 

“There  has  *filso  been  introduced  in  evidence  before 
you  certain  evidence  in  regard  to  a contract  made  by  the 
Waters  Pierce  Oil  company  with  the  Eagle  Refining  com- 
pany, and  also  with  C.  W.  Robinson,  with  J.  L.  Lewis 
and  Stillwell  Bros.,  in  the  State  of  Texas,  by  which  they 
purchased  the  business  of  such  concerns;  you  are  instruc- 
ed  that  such  transactions  as  these  are  not  believed  to  be 
in  violation  of  the  laws  of  this  State,  and  the  evidence  in 


—25-- 


regard  to  these  transactions  will  only  be  considered  as 
bearing  upon  the  course  of  dealing  of  defendant  company 
in  this  State.” 

Possibly  this  will  come  as  a surprise  to  some  of  the 
readers  of  this  history.  It  would  likely  puzzle  you  to 
name  the  specific  violation  for  which  the  jury  found  the 


Waters  Pierce  guilty,  and  for  which  it  was  finally  expelled 
from  Texas.  I liave  eliminated  all  of  the  ofifenses  which 
are  falsely  charged  against  it  by  certain  demagogues,  and 
which  thousands  of  honest  men  have  been  deluded  into 
believing,  and  in  the  next  chapter  I will  reveal  the  “crime” 
for  which  the  company  was  punished. 


Chapter  X. 

DEATH  OF  THE  OLD  WATERS  PIERCE  OIL  COMPANY 


For  what  specific  offense  was  the  Waters  Pierce 
Oil  company  expelled  from  Texas  under  the  decision 
which  was  affirmed  on  March  19,  1900,  by  the  Supreme 
Court  of  the  United  States? 

Aluch  of  the  popular  animosity  against  this  company 
unquestionably  arises  from  a belief  that  it  was  then 
adjudged  a trust;  that  it  was  declared  a part  of  the  Stand- 
ard Oil  company;  that  it  had  defied  the  laws  of  Texas 
by  suppressing  competition  by  the  lowering  of  prices; 
by  the  purchase  of  concerns  which  invaded  its  territory, 
and  that  it  was  a conspiracy  in  restraint  of  trade.  These 
assertions  have  been  made  thousands  of  times  in  print 
and  on  the  stump,  and  yet,  as  I set  forth  in  the  last  chap- 
ter. all  of  these  charges  were  withdrawn  from  the  con- 
sideration of  the  jury  by  Judge  Brooks,  who  specifically 
instructed  the  twelve  men  that  there  was  nothing  in 
the  Standard  Oil  agreement  tending  to  incriminate  the 
Waters  Pierce  Oil  cpmpany. 

The  plain  and  exact  truth  of  the  matter  is  that  the 
company  was  convicted  on  a trivial  offense,  and  the  ver- 
dict did  not  in  the  slightest  way  condemn  it  for  the 
greater  crimes  which  were  charged  against  it.  It  was 
like  arresting  a man  for  the  bribery  of  a legislature  and 
convicting  him  of  giving  a tip  to  a waiter.  It  is  the  mis- 
fortune of  the  Waters  Pierce  that  the  historians  of  its 
troubles  have  used  the  wheels  of  justice  on  which  to 
grind  their  political  war  axes. 

THE  BROWNSVILLE  REBATES. 

Wdien  the  first  suit  was  brought  under  the  Texas 
anti-trust  law  of  1889  the  officials  of  the  Waters  Pierce 
decided  to  obey  the  law  to  the  best  of  their  ability — 
and  I use  that  latter  phrase  advisedly — since  no  con- 
cern nor  partnership  could  literally  have  obeyed  that 
law  had  it  tried.  The  mandate  of  that  wonderful  en- 
actment was  that  prices  should  not  be  raised,  lowered 
nor  fixed  at  any  scale. 

In  this  emergency  the  Waters  Pierce  called  on  its 
lawyers  and  besought  them  to  point  out  a way  in  which 
it  could  continue  to  do  business  with  the  best  chance 
of  escaping  prosecution.  Of  course  there  was  no  way 
to  obey  the  law,  and  possibly  their  lawyers  told  them  so, 
and  perhaps  they  should  have  quit  business  then  and 
there  rather  than  have  attempted  the  impossible,  but 
they  were  not  that  altruistic  and  here  is  what  happened: 
The  company  sent  to  all  of  its  managers  and  agents 
in  Texas  the  following  circular  letters: 

“Waters  Pierce  Oil  Company,  St.  Louis,  December 
31,  1895. — Circular  Letter  No.  524;  Subject,  Texas  Trust 


Law. — Dear  Sir:  During  the  recent  trial  of  ?\lanager 

Hathaway  at  Waco  there  was  some  evidence  elicited  in- 
dicating that  a few  agents  of  the  company  had,  on  sev- 
eral occasions,  agreed  with  retail  customers  to  furnish 
the  latter  with  oils  at  reduced  prices,  on  condition  that 
they  would  sell  to  customers  at  agreed  fixed  prices.  Such 
arrangements,  if  made,  were  offered  without  the  author- 
ity or  knowledge  of  the  company  and  contrary  to  its 
policy  and  previous  instructions  on  this  point. 

“Managers  and  agents  will  therefore  refrain  from 
entering  into  any  agreements  whatever  with  customers, 
or  from  even  making  suggestions  to  them  regarding 
prices  at  which  they  shall  sell  oil  to  others. 

“On  the  other  hand,  in  competing  for  or  to  retain 
trade,  we  have  the  right  to  make  rebates,  sell  or  refuse 
to  sell  certain  persons,  sell  to  different  persons  at  dif- 
ferent prices,  sell  at  lower  prices  than  competitors  make, 
raise  prices,  or  to  make  contracts  for  supplying  custo- 
mers with  all  oil  required  by  them  for  a definite  period, 
according  as  circumstances  may  from  time  to  time  re- 
quire, for  we  are  advised  by  counsel  that  such  matters 
are  not  violative  of  the  trust  law.  Very  respectfully, 

“A.  M.  Finlay,  Vice  President  ” 

LAWYERS  AND  JUDGES. 

The  principal  difference  between  a good  lawyer  and 
the  average  judge  is  that  the  first  delivers  his  opinion 
in  his  private  office  for  a private  fee,  and  that  the  judge 
delivers  his  opinions  from  the  bench  for  a public  salary. 
The  lawyer  becomes  a judge,  the  judge  becomes  a law- 
yer, and  no  halo  of  unnatural  wisdom  rests  over  him 
in  either  instance.  Both  make  mistakes  for  the  obvious 
reason  that  the  law  is  the  most  inexact  of  all  the  sci- 
ences. I trust  that  this  little  homily  will  not  impeach  me 
of  disrespect  for  the  law  or  of  the  courts.  Like  most 
humans  my  respect  is  about  in  proportion  to  my  ignor- 
ance, and  I cheerfully  confess  that  to  me  the  ways  of 
the  law  and  of  the  courts  are  shrouded  in  more  than 
Egyptian  darkness. 

However,  to  tread  the  foggy  labyrinths  of  the  law 
the  modern  corporation  or  individual  of  affairs  must  rely 
on  a lawyer,  and  the  Waters  Pierce  was  no  exception 
to  this  rule.  Of  course,  a company  or  an  individual  can 
not  ask  immunity  on  the  plea  that  it  has  followed  the 
advice  of  legal  counsel,  but,  on  the  other  hand,  the  cor- 
poration which  follows  closely  the  advice  of  able  and 
conscientious  lawyers  does  all  which  reasonably  can  be 
expected  in  an  age  when  no  one  can  say  with  certainty 


what  is  or  what  is  not  the  law. 
-26- 


HOW  THE  LAW  WAS  VIOLATED. 

It  was  brought  out  in  the  Travis  county  trial  of 
1897  that  the  Waters  Pierce  agent  in  Galveston  had,  at 
various  dates  from  1881  until  1896,  entered  into  contracts 
with  several  merchants  and  brokers  in  Brownsville,  un- 
der the  terms  of  which  the  latter  received  rebates  in 
consideration  of  their  purchasing  oils  from  the  Waters 
Pierce  and  selling  them  at  the  latter’s  schedule  prices. 
These  contracts  were  of  varying  characters,  but  the  sum 
and  substance  of  the  whole  matter  was  that  Judge 

Brooks,  in  his  charge  to  the  jury,  hinged  the  case  of 

the  guilt  or  innocence  of  the  Waters  Pierce  on  these 
transactions.  He  thus  limited  the  discretion  of  the  jury, 
and  I ask  those  who  have  persistently  been  misled  con- 
cerning why  the  Waters  Pierce  was  expelled  from  Texas 
to  read  what  follows. 

Judge  Brooks  said  to  the  jury:  “The  questions  for 

you  to  determine  in  this  case  are;  (1)  Were  any  of  the 
contracts  mentioned  in  section  10  (the  Brownsville  re- 
bate contracts)  of  this  charge  made  and  entered  into 

and  carried  out  by  the  defendant  company  in  this  State 

since  July  6,  1889,  acting  through  its  agents?  (2)  Wheth- 
er such  agents  were  acting  in  the  scope  of  their  authority 
in  making  such  contracts,  or,  if  not,  whether  same  were 
ratified  or  acquiesced  in  by  defendant  company  after 
they  were  so  made?  (3)  Whether  said  contracts,  if  any, 
relate  to  interstate  commerce  or  to  business  within  this 
State?” 

Only  that^nd  nothing  more.  The  Standard  Oil 
connection  was  not  considered,  the  right  of  the  Waters 
Pierce  to  raise  and  lower  prices  was  conceded,  its  right 
to  purchase  competing  firms  was  admitted — the  one  is- 
sue was  whether  or  not  it  had  acquiesced  in  the  act  of 
its  Galveston  agent  in  granting  rebates  to  some  petty 
grocers  and  small  jobbers  in  the  little  village  of  Browns- 
ville, then  isolated  from  the  world  save  for  the  occasional 
visit  of  a schooner  or  a tramp  steamer.  The  company 
denied  all  knowledge  of  these  contracts  and  authority  of 
the  Galveston  agent  to  make  them,  nevertheless  the  jury 
found  the  company  guilty  on  that  charge  and  forfeited 
its  permit  to  do  business  in  Texas. 

The  case  went  to  the  court  of  Civil  Appeals,  thence 
to  the  Supreme  Court  of  Texas,  where  a writ  of  error 
was  denied.  A Federal  court  granted  a writ  which 
brought  the  case  before  the  Supreme  Court  of  the 
United  States,  which  upheld  the  lower  courts  on  a 
decision  handed  down  on  March  19,  1900.  A word  con- 
cerning this  decision. 

THE  SlPPtEME  COURT  DECISION. 

It  is  the  common  belief  that  this  decision  convicted 
the  Waters  Pierce  Oil  company  of  all  the  charges  pop- 
ularly laid  against  it,  and  it  is  also  believed  that  this 
decision  affirmed  the  validity  of  the  anti-trust  laws  of 
Texas.  Those  who  have  been  led  to  hold  such  views 
are  mistaken. 

The  Supreme  Court  of  the  United  States  declined  to 
pass  upon  the  constitutionality  of  the  Texas  anti-trust 
laws.  It  held,  in  effect,  that  when  the  Waters  Pierce 
solicited  and  received  a permit  on  July  6,  1889,  that  it 
tacitly  agreed  to  accept  the  restrictions  of  the  law  passed 
just  prior  to  the  granting  of  that  permit,  as  one  of  the 
conditions  upon  which  it,  a foreign  corporation,  was 
licensed  to  do  business  in  Texas,  and  that  a violation  of 
these  restrictions  subjected  its  permit  to  cancellation. 
In  rendering  the  decision  Justice  McKenna  quoted  a 
former  Supreme  Court  ruling:  “It  was  assumed  as  set 


tied  tliat  the  right  of  a foreign  corporation  to  engage  in 
business  within  a State  other  than  that  of  its  creation 
depends  solely  upon  the  will  of  such  State.” 

Therefore,  the  Travis  county  jury  having  found  the 
Waters  Pierce  guilty  of  a specific  violation  of  the  law, 
the  Supreme  Court  declined  to  interfere.  This  means 
that  Texas  or  any  other  State  can  impose  any  restric- 
tions or  qualifications  on  a corporation  incorporated 
in  another  State  as  a condition  precedent  to  its  trans- 
acting any  business,  other  than  interstate,  within  its 
borders.  It  means  that  it  can  absolutely  bar  a corpora- 
tion for  any  cause,  but — and  bear  this  in  mind — it  does 
not  mean  that  it  can  confiscate  its  property  without  due 
process  of  law. 

Bear  in  mind  that  the  question  of  a money  penalty 
was  not  before  the  Supreme  Court  of  the  United  States 
in  that  case,  and  it  never  has  been  on  any  issue  yet 
raised  through  the  enforcement  of  the' anti-trust 'laws  of 
Texas.  This  high  court  has  simply  declined  to  interfere 
with  what  is  known  as  the  “police  powers”  of  the  State. 
These  are  practically  unlimited,  but  it  is  a far  different 
thing  simply  to  oust  an  offending  corporation  than  to 
appropriate  its  money  and  assets  by  fines.  That  great 
question  has  yet  to  be  passed  upon,  and  when  we  get  a 
decision  we  shall  know  more  about  the  constitutionality 
of  certain  laws  than  we  now  do.  I doubt  if  the  average 
jury  is  competent  to  pass  on  that  question.  It  involves 
the  permanence  of  our  entire  industrial  and  commercial 
system,  and  it  will  not  be  decided  by  appeals  to  passion, 
nor  will  the  demagogic  oratory  of  office  seekers  have 
any  weight  in  tipping  the  scales  of  justice. 

RESULT  OF  ALL  PROSECUTIONS. 

I shall  prove  conclusively  before  I get  through  that 
the  only  legal  offenses  charged  against  the  Waters 
Pierce  Oil  companies  were  committed  prior  to  1898. 
These  condemned  transactions  were  in  accord  with  com- 
petitive methods  which  were  in  general  practice  and 
which  had  been  handed  down  through  the  ages,  and  not 
until  1889  was  there  any  law  against  them  and  not  until 
later  years  was  there  any  public  sentiment  opposed  to 
them.  And  yet,  what  was  practically  the  sum  total  of 
the  “crimes”  affirmed  by  the  courts  against  the  Waters 
Pierce  up  to  1900?  The  making  of  the  Brownsville 
contracts,  which  involved  in  the  aggregate  an  insig- 
nificant sum.  That’s  all. 

True,  there  was  one  joint  indictment  at  Waco  against 
Mr.  Pierce,  J.  D.  Rockefeller  and  a score  of  others,  but 
the  charges  against  them  were  so  trivial  and  vague  that 
no  State  would  honor  a requisition.  More  than  that 
there  was  then  no  marked  antipathy  or  public  senti- 
ment against  Mr.  Pierce  or  his  company.  When  the 
news  came  that  the  Supreme  Court  had  affirmed  the 
judgment  ousting  the  Waters  Pierce  there  was  more  of 
surprise  than  of  rejoicing.  Three  years  had  passed  since 
the  suit  was  brought,  and  most  citizens  had  forgotten 
the  issues  involved.  • 

There  was  no  popular  demand  for  the  expulsion  of 
the  company  from  Texas.  The  affairs  of  the  Waters 
-Pierce  had  not  at  that  time  become  involved  in  the 
politics  of  the  State.  There  were  no  “Bailey”  and  “anti- 
Bailey”  factions,  and  the  people  had  not  then  bein 
incited  to  a campaign  for  the  destruction  of  all  corpora- 
tions regardless  of  what  should  be  reared  on  their 
wrecks.  The  science  of  extracting  “commissions,”  “fees” 
and  of  creating  fat  receiverships  was  yet  in  its  infancy. 
We  were  not  then  suffering  from  any  overdose  of  pros- 


—27— 


perity,  and  there  was  no  wild  crusade  for  the  annihila- 
tion of  the  oil  enterprise  which  had  served  Texas  well. 
Do  I fairly  state  the  situation  which  then  existed?  I 
derive  it  from  a careful  study  of  the  newspaper  com- 
ments and  the  speeches  made  at  that  time. 

There  was  a desire  to  punish  the  Waters  Pierce 
fairly  for  what  it  had  done,  but  I can  not  find  any  intent 
to  wreak  wholesale  vengeance  on  it.  However,  the  de- 
cision of  the  Supreme  Court  of  the  United  States  made  a 
compromise  out  of  the  question.  It  killed  the  former 
Waters  Pierce  Oil  company  of  Texas. 

OUK  WEIRD  LAW  CODE. 

Please  follow  closely  what  follows,  and  excuse  this 
intrusion  of  a purely  personal  opinion. 

To  the  best  of  my  ability  I have  attempted  to  call 
public  attention  to  the  glaring  absurdities  and  ridiculous 
technicalities  of  our  system  of  law.  Balzac  once  declared 
that  a country  which  had  40,000  laws  had  no  law.  We 
have  many  times  that  number  of  laws,  and  only  a 
statistician  knows  how  many  conflicting  decisions.  This 
is  a condition  which  exists  in  no  other  country  on  earth, 
and  so  long  as  it  continues  the  administration  of  justice 
will  be  impossible.  The  present  muddle  in  the  Texas 
and  Federal  courts  over  the  Waters  Pierce  receiver- 
ship case  is  only  6ne  of  a thousand  instances  which 
would  be  laughable  were  they  not  serious.  I know  of  one 
piece  of  litigation  in  Texas  in  which  the  attorney  fees 
on  both  sides  have  averaged  $50,000  a month  for  more 
than  two  years. 

I am  not  to  blame  for  this  legal  anarchy,  and  neither 
is  Mr.  H.  C.  Pierce  nor  any  other  individual.  Put  the 
blame  where  it  belongs — on  the  lawyers  who  have  ruled 
our  legislatures  for  a hundred  years,  and  who  refuse  to 
make  a concerted  move  for  a simple  codification  of 
laws,  and  whose  lack  of  initiative  is  based  on  the  purely 
selfish  motive  that  the  more  complicated  and  obscure  the 
laws  the  more  their  employment  and  reward.  This  is 
blunt  and  perhaps  impolitic,  but  it  is  the  truth,  and 
every  intelligent  student  of  affairs  knows  it.  Keep  right 
on  sending  lawyers  and  more  lawyers  to  your  legisla- 
tures to  pass  more  and  more  laws,  create  new  and  more 
complicated  systems  of  courts,  but  in  the  name  of  com- 
mon sense  don’t  complain  if  they  sink  you  deeper  and 
deeper  into  the  legal  mire,  and  charge  you  roundly 
for  the  service. 

So  long*  as  this  chaos  continues  corporations  and  in- 
dividuals will  take  advantage  .of  it.  That  is  the  new 
competition — to  sail  one's  commercial  ship  through  the 
tortuous  channel  without  striking  a legal  rock — and  we 
are  paying  good  lawyer  pilots  fees  of  $100,000  and  $1,000,- 
000  for  their  services  in  single  instances.  You  and  I pay 
these  fees  in  the  final  analysis,  my  friend — don’t  you  for- 
get that — and  we  will  continue  to  pay  them  until  enough 
of  us  have  the  sense  and  influence  to  install  a simpler 
and  better  system.  In  the  meantime  a corporation  has 
a perfect  right  to  apply  for  its  advantage  every  law,  de- 
cision or  technicality  whicfi  its  counsel  can  discover. 
Why  not?  Is  it  unlawful  or  immoral  to  seek  all  the  pro- 
tection and  advantage  the  law  allows?  The  corpora- 
tion which  fails  to  do  this  will  be  overwhelmed  by  its 
competitors.  This  is  the  first  rule  of  the  new  competi- 
tion. 


THE  DEAD  WATERS  PIERCE  COMPANY. 

I say  that  in  1900  the  Waters  Pierce  Oil  company 
was  killed  so  far  as  Texas  was  concerned.  The  Supreme 
Court  of  the  United  States  administered  the  coup  de 
grace.  It  affirmed  the  judgment  barring  the  company 
from  Texas.  There  was  some  doubt  about  this  at  first, 
and  the  lawyers  of  the  company  as  well  as  the  law  of- 
ficials of  Texas  thought  it  possible  that  life  was  not  en- 
tirely extinct,  and  the  Waters  Pierce  attorneys  set  about 
finding  a way  in  which  the  corporation  could  be  rein- 
stated on  paying  a “good  round  penalty.”  They  learned 
that  there  was  no  way.  It  was  legally  impossible  to 
reinstate  a corpse. 

Now  I wish  again  to  remind  my  critics  that  the 
Waters  Pierce  Oil  company  which  was  convicted  in 
Travis  county  in  1897  was  dead.  The  jury  said  so,  the 
Court  of  Civil  Appeals  said  so,  the  Supreme  Court  of 
Texas  said  so,  the  Supreme  Court  of  the  United  States 
said  so,  the  attorney  general  and  all  his  advisors  looked 
up  all  the  precedents  and  said  so,  and  the  Waters  Pierce 
Oil  company  finally  admitted  that  it  was  dead.  Very 
well. 

Therefore  that  Waters  Pierce  Oil  company  which 
was  later  granted  a permit  to  do  business  in  Texas 
could  not  have  been  the  same  company.  Possibly  it  may 
have  been  its  ghost,  but  I do  not  understand  that  the 
law  recognizes  ghosts,  especially  corporation  ghosts. 
No,  it  was  a new  company,  legally  incorporated  on  May 
29,  1900,  under  the  laws  of  the  State  of  Missouri,  and 
regularly  admitted  two  days  later  under  the  laws  of  the 
State  of  Texas.  Therefore,  it  can  not  be  charged  with 
the  sins  of  the  former  Waters  Pierce  Oil  company  which 
was  buried  by  the  Supreme  Court  of  the  United  States. 

THE  LIVE  WATERS  PIERCE  COMPANY. 

“But,”  protests  my  critic,  “it  was  really  the  same 
old  Waters  Pierce  Oil  company.  It  had  the  same  name, 
practically  the  same  stockholders,  and  it  went  right 
ahead  with  its  business  the  same  as  if  nothing  had  hap- 
pened. It  secured  readmission  by  a trick  and  a fraud.” 

1 thought  we  had  agreed  that  the  first  Waters  Pierce 
Oil  company  was  dead.  The  Supreme  Court  declared 

it  dead.  You  say  that  it  did  not  really  die.  Then  the 

Supreme  Court  and  all  of  the  officials  of  Texas  were 
mistaken.  Therefore  the  original  company  really  was 
not  expelled  from  Texas.  Therefore  there  was  no  rea- 
son why  it  should  have  applied  for  admission.  No,  that 
does  not  stand  the  test,  my  critical  friend.  I shall  have 
to  insist  that  the  old  Waters  Pierce  Oil  company  was 

and  is  as  dead  as  Caesar,  and  I shall  prove  in  the  next 

chapter  that  the  new  Waters  Pierce  Oil  company  acted 
strictly  within  the  law  when  it  applied  for  and  received 
a permit  to  do  business  in  Texas. 

I do  not  say  that  it  was  ethically  right  that  a new 
Waters  Pierce  Oil  company  should  arise  from  the  tomb 
of  the  old.  I say  that  it  was  the  LAW  that  it  should 
and  did,  and  I call  the  attention  of  certain  of  my  able 
critics  to  the  fact  that  their  quarrel  is  not  with  l\Ir.  H. 
C.  Pierce  or  myself,  but  with  the  L.'kW  which  they  insist 
shall  be  respected. 


Chapter  XI. 

ADMISSION  OF  'FHE  NEW  COME  ANY 


The  Statement  has  been  made  unnumbered  times 
that  the  Waters  Pierce  Oil  company  secured  readmis- 
sion into  Texas  in  1900  through  fraud.  This  statement 
has  been  so  persistently  reiterated  by  men  of  high  official 
standing  that  it  has  been  accorded  credence  by  thou- 
sands of  citizens  who  wish  to  be  fair,  but  who  have 
never  had  an  opportunity  to  study  the  facts.  Much  of 
the  ill-feeling  against  Mr.  Pierce  and  his  company  has 
been  engendered  by  the  widely  circulated  charge  that 
the  Waters  Pierce  re-entered  Texas  in  consequence  of 
an  underhanded  plot,  and  that  Mr.  Pierce  committed  per- 
jury to  insure  its  success. 

In  this  article  I shall  so  fully  and  explicitly  prove 
the  absolute  falsity  of  this  charge  that  the  most  reckless 
of  politicians  will  hesitate  before  again  giving  it  pub- 
licity. Let  me  say  in  advance  that  if  fraud  was  commit- 
ted it  was  in  defiance  of  the  Supreme  Court  of  the 
United  States — a defiance  which  has  remained  unre- 
buked by  that  High  and  alert  tribunal  and  it  must  have 
been  accomplished  with  the  consent  and  connivance  of 
certain  of  the  exalted  officials  of  the  two  great  States 
of  Texas  and  Missouri — none  of  the  two  great  States 
since,  been  accused  or  suspected  of  crime  or  dereliction 
in  duty. 

This  baseless  charge  is  largely  responsible  for  plac- 
ing the  Waters  Pierce  in  a false  position  before  the  peo- 
ple of  Texas  and  of  the  Southwest.  By  it  the  company 
has  lost  prestige,  has  suffered  vast  financial  loss,  has 
been  branded  as  an  outlaw  and  its  officials  have  been 
taunted  and  reviled  as  criminals.  The  people  of  Texas 
are  the  last  in  the  world  to  harbor  an  unjust  suspicion 
or  to  inflict  unmerited  punishment.  They  have  been 
misled  on  some  points  and  deliberately  deceived  on 
others  and  I shall  prove  it. 

CHAKGE  AGAINST  WATERS  PIERCE.  . 

The  false  charge  most  generally  made  against  this 
company  may  thus  be  stated:  It  is  claimed  that,  upon 

its  ousting  from  Texas,  Mr.  Pierce  began  to  conspire  for 
reinstatement,  and  all  other  expedients  having  failed  he 
proceeded  to  go  through  the  form  of  dissolving  the  old 
company.  Mr.  Pierce  is  said  then  illegally  to  have  re- 
organized the  company  in  Missouri,  and  through  some 
form  of  duplicity  obtained  incorporation  papers.  Also, 
in  the  meantime,  he  had  enlisted  the  support  of  Sen- 
ator Bailey,  who,  under  his  employ,  went  to  Austin  and 
used  his  political  influence  to  induce  the  Texas  State 
officials  to  “give  the  Waters  Pierce  another  chance.” 
•As  a sequel  to  this  misuse  of  influence,  it  is  alleged  that 
Mr.  Pierce  went  to  Austin  armed  with  the  “alleged” 
incorporation  papers,  and  after  a conference  with  the 
officials  agreed  to  sign  a specially  prepared  affidavit  cer- 
tifying that  the  W'aters  Pierce  had  no  affiliation  of  any 
kind  with  the  Standard  Oil  company.  Mr.  Pierce  signed 
this  affidavit — so  the  charges  run — which  act,  in  combi- 
nation with  the  pleadings  of  Senator  Bailey,  induced 
the  State  officials  to  grant  the  company  the  coveted  per- 
mit, and  through  this  fraud  the  Waters  Pierce  obtained  a 
new  lease  of  life  by  which  it  could  plunder  Texas. 

If  these  charges  can  be  substantiated,  no  punishment 
is  too  severe  for  Mr.  Pierce  and  the  company  which 
bears  his  name.  If  these  charges  be  false,  a great  in- 


justice has  been  done  to  Mr.  Pierce,  and  every  honest 
man  in  Texas  will  regret  that  unscrupulous  politicians 
have  used  these  falsehoods  in  an  attempt  to  secure  per- 
sonal advantage. 

I now  propose  to  tell  the  facts  as  briefly  as  possi- 
ble consistent  with  clearness,  and  I challenge  the  most 
severe  critic  to  pick  one  flaw  or  dispute  one  item  in  the 
following  narrative  of  how  the  Waters  Pierce  Oil  com- 
pany obtained  a permit  to  do  business  in  Texas  after 
the  original  company  was  ousted  by  mandate  of  the  Su- 
preme Court  of  the  United  States. 

THE  CRITICAL  POSITION  OF  THE  COMPANY. 

As  I stated  in  the  last  chapter,  there  was  no  general 
desire  in  1900  to  inflict  on  the  Waters  Pierce  so  severe 
a punishment  as  expulsion  from  Texas.  Fully  90  per 
cent  of  all  the  oil  used  in  Texas  was  handled  by  this 
company,  and  had  it  been  barred  at  the  time  of  the  de- 
cision incalculable  hardship  would  have  been  wrought 
on  the  consumers  of  the  State.  It  was  a stupendous  en- 
terprise, equipped  with  a plant  and  a distributing  sys- 
tem which  could  not  be  replaced  in  a day  or  a year. 
No  intelligent  man  in  possession  of  the  facts  urged  that 
Texas  should  blot  this  vast  business  out  of  existence. 

Still  the  old  company  ^was  dead  so  far  as  Texas  was 
concerned.  Because  a few  gallons  of  oil  had  been  al- 
lowed a rebate  in  Brownsville  the  company  had  been 
caught  in  a legal  trap,  and  investigation  showed  that  it 
was  impossible  to  reinstate  the  old  company  in  Texas. 

No  word  of  mine  can  add  anything  to  the  respect 
which  the  people  of  Texas  bear  to  the  memory  of  T. 
S.  Smith — “Honest”  Tom  Smith — then  attorney  general 
of  Texas.  Had  he  lived  he  would  have  been  elevated 
to  the  highest  office  in  the  gift  of  the  State,  and  I as- 
sume that  those  who  knew  and  loved  him  will  be  ready 
to  accept  his  written  word  as  contained  in  his  official 
acts  and  correspondence,  and  will  estimate  it  at  its  proper 
worth  against  the  utterances  of  certain  characters  who 
have  been  conspicuous  in  this  controversy. 

CONSIDERATION  SHOWN  THE  WATERS  PIERCE. 

The  original  permit  from  Texas  to  the  Waters  Pierce 
Oil  company  was  granted  on  June  6,  1889,  and  was  for 
ten  years.  It  therefore  expired  on  June  6,  1899.  Before 
that  date  the  company  formally  applied  for  a new  per- 
mit. Attorney  General  Smith  advised  the  refusal  of 
such  a permit  on  two  grounds,  viz.,  that  a suit  for  its  oust- 
ing had  been  affirmed  by  the  higher  courts  of  Texas, 
and  was  then  pending  before  the  United  States  Supreme 
Court,  and,  second,  that  the  company  had  failed  to  give 
notice  of  its  increase  of  capital  from  $100,000  to  $400,000. 
This  made  a difference — as  I understand  it — of  $95.51  due 
the  State  for  taxes,  and  an  attempt  has  been  made  to 
prove  that  the  Waters  Pierce  Oil  company  deliberately 
attempted  to  defraud  Texas  out  of  this  amount.  Per- 
haps it  did — I shall  not  discuss  it  in  detail — but  the  gen- 
eral reputation  of  this  corporation  was  that  it  had  at 
least  a selfish  wisdom  which  should  absolve  it  from 
the  charge  of  risking  its  corporate  life  for  such  a petty 
sum,  or  a hundred  times  it. 

The  permit  was  refused.  How  tlmn  did  it  happen  that 
the  company  continued  to  do  business  in  Texas  from 


—29— 


June  6,  1899,  until  May  31,  1900,  without  a permit?  It 
did  do  that,  and  it  did  it  by  grace  and  permission  of 
Tom  Smith,  and  he  granted  such  permission  because  he 
knew  that  it  was  in  accord  with  the  zvishes  of  the  other 
State  officials  and  in  harmony  with  the  almost  unanimous 
sentiment  of  the  State. 

THE  POLICY  OF  TOM  SMITH. 

When  the  Supreme  Court  handed  down  its  decision 
on  March  19.  1900,  decreeing  the  expulsion  of  the  Wa- 
ters Pierce  Oil  company  from  Texas,  Attorney  General 
Smith  gave  the  company  an  extension  of  time  until  May 
15  in  which  to  adjust  its  affairs.  It  was  then  believed 
by  both  sides  that  an  arrangement  could  and  should  be 
made  by  which  the  Waters  Pierce  would  pay  some  rea- 
sonable penalty  and  be  permitted  lo  resume.  On  May 
9 J.  D.  Johnson,  the  leading  attorne}'  of  the  company, 
thus  wrote  to  Attorney  General  Smith : 

"We  have  about  reached  the  conclusion  to  proceed 
by  mandamus  against  the  secretary  of  state,  and  avail 
ourselves  of  your  very  kind  undertaking  to  join  us  in 
letting  the  public  know  that  the  suit  is  an  amicable  one. 
for  the  sole  purpose  of  testing  the  only  legal  question 
involved,  namely,  the  right  of  the  authorities  of  the 
State  of  Texas  to  grant  to  the  Waters  Pierce  Oil  com- 
pany a new  permit  to  do  business  within  the  State,  in 
view  of  the  perpetual  hijunction  rendered  against  it  in 
the  suit  at  Austin.” 

Does  this  indicate  any  decided  degree  of  rancor? 
Hardly.  Please  read  closelv  the  following  paragraph 
in  Mr.  Johnson’s  letter  to  Attorney  General  Smith. 

“Pending  the  mandamus  proceeding  I shall  make 
all  necessary  preparations  for  reorganization  of  the  coin- 
pan}-,  in  the  event  the  Supreme  Court  holds  that  the  in- 
junction is  conclusive,  and  that  a new  permit  can  not  be 
issued  to  the  company.” 

What  do  you  think  of  that?  You  have  been  told 
that  Mr.  Pierce  and  his  lawyers  met  in  St.  Louis  and 
secretly  plotted  to  circumvent  the  officials  of  Texas. 
You  have  been  told  it  times  without  number,  and  partisan 
orators  have  talked  themselves  red  in  the  face  in  denun- 
ciation of  the  atrocity  of  this  crime — and  now  we  learn 
that  the  leading  lazvyer  of  this  zvicked  company  calmly 
notified  the  attorney  general  of  Texas  just  zvhat  it  pro- 
posed to  do.  Surely  this  was  a strange  way  to  conspire, 
unless  it  be  assured  that  Tom  Smith  was  a party  to  the 
conspiracy.  If  so,  it  would  seem  that  he  should  have  de- 
stroyed this  letter.  Let  us  glance  at  extracts  from  At- 
torney General  Smith’s  letter  in  reply. 

In  a letter  dated  May  15,  1900,  addressed  to  J.  D. 
Johnson,  Attorney  General  Smith  agreed  to  extend  the 
time  until  May  31.  It  was  understood  that  if  the  Wa- 
ters Pierce  did  not  act  by  that  time  an  application  would 
be  made  for  the  appointment  of  a receiver.  In  another 
letter  dated  the  same  day  the  attorney  general  said: 

THE  POLICY  OF  TEXAS. 

“It  is  not  the  policy  of  this  State  to  confiscate  the 
property  of  any  one,  simply  because  we  believe  we 
have  an  advantage,  neither  is  it  the  policy  of  this  State 
to  oppress  either  citizens  or  corporations,  but  to  insist 
and  require  that  its  laws  be  strictly  observed,  and  busi- 
ness be  done  in  this  State  in  compliance  with  the  law. 
Having  been  assured  by  both  you  and  Mr.  Pierce  that 
the  purpose  of  your  company  was  to  in  good  faith  do 
business  according  to  law,  and  to  strictly  observe  the 
law  of  this  State,  I feel  that  it  would  be  right  to  grant 
you  this  extension.’ 


This  manly  declaration  is  one  which  well  may  serve 
as  a model  today,  and  in  its  execution  no  rights  will 
be  lost  to  the  State  of  Texas.  F'or  the  benefit  of  those 
who  insist  that  I present  both  sides  of  this  case  I cheer- 
fully add  the  concluding  paragraph  of  Tom  Smith’s  let- 
ter: 

“It  is  just  to  you  to  say  further,  and  I hope  you 
will  advise  Mr.  Pierce  to  this  effect,  that  I have  today 
received  a letter  from  Luling,  Texas,  in  which  it  is 
stated  that  the  company  there  is  doing  business  like  it 
used  to  do;  that  they  sell  to  all  the  people  alike  through 
their  agent  and  afterwards  allow  some  a rebate  of  from 
1 to  2 cents  a gallon,  thus  giving  one  merchant  an  advan- 
tage over  others.  I think  this  should  be  looked  after  by 
Mr.  Pierce.  Very  truly  yours, 

“T.  S.  Smith,  Attorney  General.” 

Whether  or  not  the  Luling  agent  was  guilty  I do 
not  know.  If  guilty,  he  violated  his  orders,  since  the 
Waters  Pierce  instructions  in  and  after  1897  were  im- 
perative against  “doing  business  like  it  used  to  do.” 

THE  NEW  WATERS  PIERCE  OIL  COMPANY. 

The  attorneys  of  the  company  learned  on  Febru- 
ary 27,  1900,  that  there  was  no  hope  for  a modification  of 
the  order  of  the  Supreme  Court  of  the  United  States. 
They  also  learned  that  there  was  only  one  way  in  which 
a solvent  corporation  could  be  dissolved  and  later  re- 
organized in  Missouri,  and  that  was  by  the  unanimous, 
consent  of  its  stockholders.  That  was  the  law.  Wheth- 
er or  not  it  was  a just  law  is  not  a part  of  this  discussion. 
The  company  desired  to  do  business  in  Texas;  there  was 
no  official  or  popular  opposition  worth  considering 
against  its  readmission;  there  was  only  one  way  in  which 
it  could  come  back,  and  that  was  through  dissolution  and 
reincorporation,  and  this  had  to  be  done  by  the  unani- 
mous consent  of  the  stockholders.  The  manner  in  which 
this  was  obtained  will  be  discussed  later;  I wish  now  to 
stick  to  this  branch  of  the  history. 

The  fact  that  Mr.  Pierce  obtained  such  unanimous 
consent  is  fair  proof  that  he  was  in  actual  control  of 
the  company.  Those  who  profess  doubt  and  surprise 
that  the  Standard  Oil  company,  owning  as  it  did  a ma- 
jority of  the  stock  of  the  Waters  Pierce,  should  yield 
actual  control  to  Mr.  Pierce— such  doubters  should  study 
what  he  did  between  May  27  and  June  1,  1900,  and  they 
will  be  thoroughly  convinced  that  there  was  nothing 
theoretical  about  his  control. 

On  May  28,  1900,  the  directors  of  the  original  Wa- 
ters Pierce  Oil  company  met  for  the  last  time.  On  a 
motion  for  dissolution,  Henry  Clay  Pierce  voted  every 
share  of  its  stock  in  the  affirmative.  There  is  not  the 
slightest  doubt  of  the  legality  of  this  action,  but  it  would 
have  been  impossible  had  not  absolute  control  been 
lodged  in  one  man. 

On  the  following  day.  May  29,  the  State  of  Missouri 
granted  incorporation  papers  to  a new  Waters  Pierce 
Oil  company,  said  papers  being  duly  signed  by  Secretary 
of  State  Lesueur.  There  is  not  the  slightest  doubt  of 
the  legality  of  this  act. 

Two  days  later.  May  31,  application  was  formally 
made  in  Austin  for  a permit  to  the  new  Waters  Pierce 
Oil  company,  and  after  due  investigation  and  considera- 
tion the  State  officials  of  Texas  issued  such  permit. 
There  is  not  the  slightest  doubt  of  the  legality  of  this 
act. 

rONFORMING  TO  THE  LAW. 

Able  lawyers  directed  every  move  in  the  obsequies 


—30— 


of  the  old  Waters  Pierce  Oil  company,  and  these  same 
able  lawyers  supervised  every  detail  of  the  ushering  into 
existence  of  the  new  Waters  Pierce  Oil  company. 

“A  legal  trick!  A cunning  subterfuge!”  exclaims  my 
honest  but  misguided  critic.  Never  were  you  more  mis- 
taken, my  dear  sir.  There  was  no  legal  trick  about  it. 
There  was  not  a move  which  was  not  made  openly;  there 
was  not  an  act  which  was  not  fully  warranted  by  care- 
fully considered  laws;  there  was  not  an  official  signature 
to  any  of  the  documents  which  could  have  been  withheld 
under  the  law;  it  was  impossible  legally  to  have  prevented 
the  dissolution  of  the  old  company;  it  was  impossible  to 
prevent  the  incorporation  of  the  new  company  in  Mis- 
souri, and  it  was  impossible  to  estop  the  granting  of  a 
permit  to  it  in  Texas. 

Where  then  was  the  legal  trick?  What  was  the  cun- 
ning subterfuge?  Through  a technical  violation  of  the 
anti-trust  laws  of  Texas  there  was  inflicted  on  the  old 
Waters  Pierce  Oil  company  a sentence  of  death  in  that 
State.  The  owners  of  its  assets  appealed  in  turn  to 
technical  processes  made  and  provided  for  in  the  statutes 
of  Missouri  and  Texas.  They  were  impelled  to  do  this 
by  the  most  mandatory  law  in  existence — the  law  of 
self-preservation. 

If  the  law  officials  of  Missouri  and  Texas  over- 
stepped their  official  powers,  why  were  they  not  prose- 
cuted and  impeached?  No  such  move  was  contem- 
plated or  even  threatened  by  those  who  knew  the  law 
and  the  facts.  I submit,  therefore,  to  any  fair-minded 
man,  that  it  is  rank  injustice  to  Mr.  Pierce  and  to  his 
company  that  the  official  acts  which  resulted  in  the  pres- 
ervation of  their  interests  in  Texas  should  be  denounced 
as  fraudulent.  I shall  not  spare  Mr.  Pierce  when  he  is 
deserving  of  criticism,  but  shall  leave  it  to  others  to 
object  that  he  availed  himself  of  the  law  at  a time  when 
another  law  was  threatening  a punishment  absurdly  out 
of  proportion  to  the  offense  for  which  his  company  had 
been  convicted. 

THK  PAIM’  PL.IYKl)  liY  SENATOR  BAILEY. 

At  this  point  my  critic  naturally  asks  me  another 
question. 

“If  it  was  impossible  under  the  law,”  he  demands, 
“to  keep  the  new  Waters  Pierce  Oil  company  out  oi 
Texas,  why  was  it  that  Mr.  Pierce  called  on  Senator 
Bailey  to  use  his  influence  with  the  State  officials  for 
the  purpose  of  securing  a permit?” 

This  is  a fair  question  and  I shall  answer  it  blunt- 
ly. Unless  Mr.  Pierce  intended  to  retain  Senator  Bailey 
as  one  of  his  lawyers  he  had  no  right  to  ask  him  to  in- 
tercede with  the  Texas  authorities  in  behalf  of  the  old 
or  the  new  company.  The  evidence  seems  conclusive 
that  Mr.  Pierce  wished  thus  to  retain  Senator  Bailey, 
but  it  is  equally  true  that  the  latter  refused  to  accept  a 


fee,  and  that  his  intercession  on  Mr.  Pierce’s  behalf  was 
based  on  his  desire  to  grant  the.  disinterested  request 
of  a mutual  friend  who  wished  to  oblige  Mr.  Pierce. 

I shall  refuse  to  go  into  details  of  this  incident  which 
have  already  been  fully  aired  and  over  which  men 
honestly  disagree,  but  I wish  to  make  a few  observations. 
Certain  of  these  gentlemen  who  are  most  active  in  de- 
manding the  annihilation  and  confiscation  of  the  Waters 
Pierce  Oil  company  insist  that  it  shall  be  judged  by 
their  own  specially  constructed  code  of  morals  and 
ethics.  They  demand  that,  in  this  ijarlicular  instance, 
there  shall  be  applied  and  rigidly  enforced  the  stern 
and  unyielding  letter  of  the  written  and  unwritten  law; 
they  single  the  Waters  Pierce  Oil  company  out  as  the 
one  corporation  which  shall  be  condemned  for  doing 
what  all  corporations  have  done  and  are  yet  doing,  and 
they  insist  on  magnifying  various  mole  hills  of  irreg- 
ularity into  mountains  of  criminal  conspiracy. 

How  sincere  are  those  who  are  insisting  most  loudly 
that  a legislative  officer  should  have  no  corporation 
affiliations?  Has  it  become  a political  tenet  in  Texas 
that  no  corporation  lawyer  will  press  his  claims  for 
office,  and  will  all  lawyers,  if  elected,  agree  to  hold 
righteously  aloof  from  the  slightest  contact  with  corpora- 
tions? I think  not.  At  the  first  opportunity  Texas  will 
elect  her  regular  quota  of  corporation  lawyers  to  her 
legislature,  and  among  the  candidates  will  be  several 
who  now  are  striving  for  recognition  by  a hypocritical 
pretense  of  horror  that  a United  States  Senator  used  his 
influence  in  1900  on  behalf  of  the  Waters  Pierce  Oil  com- 
pany. 

BEWARE  OF  POLITICAL  HYPOCRITES. 

I hope  to  live  to  see  the  time  when  the  influence  of 
corporations  is  not  all-powerful  in  any  branch  of  our 
government.  Only  the  most  optimistic  can  see  the 
dawn-light  of  such  a day.  We  are  in  the  midst’of  an  era 
when  corporations  dictate  nominations  and  elections,  try 
to  select  judges  and  defy  the  masses  to  reach  them  with 
their  votes,  and  we  have  quite  a bit  of  road  to  travel  be- 
fore we  come  to  a sharp  turn.  In  such  a time,  with  a 
United  States  senate  filled  with  men  who  rose  to  power, 
either  by  serving  corporations  or  by  being  served  by 
corporation  lawyers,  it  would  seem  to  me  that  an  undue 
amount  of  criticism  has  been  leveled  at  Senator  Bailey 
for  the  favor  he  attempted  to  do  at  the  reciucst  of  a 
personal  friend. 

I say  “attempted  to  do”  for  the  reason  that  he  act- 
ually had  no  more  to  do  with  securing  a permit  for  the 
new  Waters  Pierce  Oil  company  than  I did.  The  com- 
pany entered  Texas  because  the  law  permitted  it  to  do 
so,  and  because  the  officials  of  Texas  did  their  duty  under 
the  law. 


--31-- 


Cbaptet  XII. 

SOME  UNANSWERABLE  OFFICIAL  PROOF 


In  the  last  chapter  I established  beyond  reasonable 
doubt,  that  the  dissolution  of  the  original  Waters  Pierce 
Oil  company  was  strictly  legal;  that  there  is  no  flaw  in 
the  method  by  which  the  State  of  Missouri  granted  pa- 
pers of  incorporation  to  the  present  Waters  Pierce  Oil 
company;  and  finally,  that  the  officials  of  Texas  had  no 
alternative  save  to  grant  a permit  to  the  new  company 
on  May  31,  1900. 

I propose  now  to  cinch  these  statements  by  unan- 
swerable proof — proof  so  clear  and  convincing  that  even 
the  most  reckless  partisan  will  hesitate  before  again 
asserting  that  the  Waters  Pierce  Oil  company  entered 
Texas  in  1900  illegally  or  through  fraudulent  methods. 

Attorney  General  Smith  was  criticised,  in  certain 
quarters,  for  advising  that  a permit  should  be  granted  to 
the  new  company.  The  same  charges  were  made  then 
as  now.  He  therefore  addressed  the  following  letter 
to  the  secretary  of  state  of  Missouri: 

“Hon.  A.  A.  Lesueur,  Secretary  of  State,  Jefferson  City,  Mo. 

“Austin,  Texas,  August  16,  1900.— Dear  Sir;  Some 
question  has  been  raised  in  the  State  of  Texas  as  to  the 
regularity  and  legality  of  the  dissolution  of  the  Waters 
Pierce  Oil  company,  which  was  incorporated  under  the 
laws  of  Missouri  on  the  7th  day  of  May,  1878. 

“1.  I wish  you  would  please  advise  me  officially, 
whether  or  not,  according  to  the  laws  of  Missouri,  the 
said  dissolution  of  the  Waters  Pierce  Oil  company  on  the 
28th  day  of  May,  1900,  was  regular;  and  whether  or  not 
it  was  according  to  the  laws  and  statutes  of  the  State 
of  Missouri;  and  whether  or  not  said  company  ceased  to 
exist  after  said  affidavit  of  dissolution  was  filed  in  your 
office. 

“2.  Will  you  please  also  state  to  me,  officially, 
whether  or  not  the  incorporation  of  the  Waters  Pierce 
Oil  company  as  shown  by  its  articles  of  association  filed 
in  your  office  May  29,  1900,  was'  the  incorporation  of  a 
new  company,  or  whether  or  not  it  was  simply  a con- 
tinuation of  the  old  Waters  Pierce  Oil  company,  char- 
tered May  7,  1878.  Very  truly  yours,  T.  S.  Smith, 
“Attorney  General  for  Texas.” 

HERE  IS  THE  PROOF. 

These  are  the  very  questions  which  are  raised  in 
certain  quarters  today.  Only  one  man  in.  all  the  world 
was  competent  to  answer  them,  and  he  did  answer  them, 
and  from  his  official  declaration  there  is  no  appeal.  I 
quote  the  salient  parts  of  the  reply  of  Hon.  A.  A.  Le- 
sueur, secretary  of  state  of  Missouri,  to  Attorney  Gen- 
eral T.  S.  Smith  of  Texas: 

“1.  The  dissolution  of  the  Waters  Pierce  Oil  com- 
pany on  the  28th  day  of  May,  1900,  was,  in  my  opinion, 
regular  and  according  to  the  laws  and  statutes  of  Mis- 
souri. Upon  the  filing  of  the  affidavit  of  dissolution  in 
the  office  of  the  secretary  of  state,  such  company  ceased 
to  exist,  and  it  is  competent  under  our  laws  and  the 
practice  of  this  State  to  incorporate  another  company. un- 
der the  same  name. 

“2.  The  Waters  Pierce  Oil  company,  having  been 
legally  dissolved  by  unanimous  consent  of  its  stock- 
holders, became  upon  the  filing  of  an  affidavit,  as  here- 
tofore stated,  extinct,  and  the  organization  of  the  Waters  Pierce 
Oil  company  under  the  articles  of  association,  filed  in 


this  office  May  29,  1900.  was  the  incorporation  of  a 
new  company,  the  existence  of  which,  under  our  laws, 
dates  from  and  begins  with  the  issuing  of  the  certificates 
of  incorporation  on  the  date  mentioned.  May  29,  1900. 

“For  these  positions  I have  an  overwhelming  number 
of  precedents. 

“A.  A.  Lesueur,  Secretary  of  State.” 

I submit  in  all  candor,  that  such  testimony  removes 
this  branch  of  the  case  from  the  range  of  argument,  but 
it  probably  will  not  prevent  irresponsible  and  unprinci- 
pled demagogues  from  repeating  the  stale  falsehood  that 
the  dissolution  was  illegal,  and  that  the  new  Waters 
Pierce  Oil  company  is  a fraud  and  a fake.  There  is  no 
effective  law  against  lying. 

Let  me  add  the  final  convincing  proof  that  Texas 
could  not  legally  refuse  a permit  to  the  new  Waters 
Pierce  Oil  company. 

HERE  IS  MORE  PROOF. 

On  July  19,  1900,  Secretary  of  State  Hardy  of  Texas 
wrote  to  Attorney  General  Smith  and  stated  that  certain 
of  the  newspapers  were  misadvising  the  public  concern- 
ing the  granting  of  the  permit,  and  asked  Tom  Smith 
for  an  official  opinion.  I quote  extracts  from  the  reply 
made  by  this  able  and  honest  attorney  general: 

“You  (Secretary  of  State  Hardy)  had  no  discretion 
and  could  not  in  law  decline  to  file  the  certified  copy 
of  the  charter,  and  to  issue  the  permit  to  do  business 
in  Texas  to  said  oil  company,  which  was  incorporated 
May  29,  1900,  in  the  State  of  Missouri.  * * * The 
proposition  of  law  to  be  decided  was,  did  the  charter 
filed  by  you  on  May  31,  1900,  show  the  formation  of  a 
new  and  distinct  company  or  was  it  a continuation  of  the 
original  corporation? 

“The  facts  in  this  case  show  that  there  was  not  a 
mere  change  of  membership,  but  a change  in  the  corpo- 
ration itself,  with  only  one  of  the  former  incorporators 
in  the  new  corporation.  It  is  true  that  the  new  corpora- 
tion took  the  name  that  the  old  corporation  had,  but  no- 
where do  I find  any  prohibition  that  a new  corporation 
can  assume  the  name  once  held  by  a former  corporation 
which  had  been  dissolved. 

“I  therefore  concluded  and  so  advised  you  that  you 
had  no  discretion  to  decline  to  file  the  charter  offered 
by  the  Waters  Pierce  Oil  company,  and  to  issue  the  per- 
mit required  by  law.  * » * jf  you  had  declined  to 

issue  the  permit,  there  is  no  question  in  my  mind  that 
the  supreme  court  would  have  compelled  you  to  do  so  by 
mandamus. 

“T.  S.  Smith,  Attorney  General.” 

With  this  official  opinion  from  Tom  Smith,  respected 
and  loved  in  life  by  all  who  knew  him,  and  revered  as 
one  whose  acts  were  above  suspicion,  I shall  rest  the  case 
of  the  legality  and  regularity  of  the  means  by  which  the 
present  Waters  Pierce  Oil  company  was  admitted  to  do 
business  in  Texas. 

H.  C.  PIERCE  AND  THE  STANDARD  OIL. 

Upon  the  organization  of  the  Standard  Oil  trust  in 
1882,  the  owners  of  60  per  cent  of  the  stock  of  the 
Waters  Pierce  Oil  company  transferred  their  holdings 
to  the  Rockefeller  combine.  One-third  of  this  stock 
was  merged  in  the  great  oil  trust  in  open  disregard  of  a 


—32— 


tacit  agreement  that  H.  C.  Pierce  should  have  first 
call  to  purchase  it.  I do  not  understand  that  there  was 
a written  option,  but  am  assured  that  Mr.  Pierce  had  a 
verbal  agreement  which  seemed  to  guarantee  his  own- 
ership or  control  of  60  per  cent  of  the  stock.  No  student 
of  the  methods  of  the  Standard  Oil  trust  of  those  days 
will  be  surprised  to  learn  that  it  ignored  this  implied 
option. 

It  is  immaterial  to  discuss  whether  or  not  this  pass- 
ing of  a majority  of  the  stock  of  the  original  Waters 
Pierce  Oil  company  to  the  Standard  was  the  result  of  a 
carefully  matured  plan  conceived  and  executed  by  the 
Cleveland  magnates.  Certain  it  is  that  Mr.  Pierce  had  no 
part  in  it,  and  it  is  a matter  of  record  that  he  protested 
against  it;  also  that  he  stoutly  declined  to  transfer  his 
holdings  to  the  trust.  It  was  the  first  time  that  a man 
of  any  prominence  had  resisted  the  plans  of  John  D. 
Rockefeller.  Mr.  Pierce  not  only  refused  to  sell,  but  he 
demanded  that  the  name  and  individuality  of  his  company 
be  preserved,  and  that  he — a minority  stockholder — be 
permitted  to  manage  the  company  and  dictate  its  policy. 

THE  ONE  INDEPENDENT  COMPANY. 

My  critic  demands  proof  of  this  statement.  The 
mere  fact  that  the  Standard  Oil  trust  permitted  the  Wa- 
ters Pierce  Oil  company  to  continue  its  corporate  indi- 
viduality during  a long  period,  at  any  time  in  which  the 
Standaod  had  the  legal  power  to  blot  it  out  of  existence, 
proves  beyond  question  that  it  either  did  not  dare  or  did 
not  care  to  refuse  the  demand  made  by  Mr.  Pierce. 

“Hold  on,”  my  critic  demands.  “You  admit,  do  you 
not,  that  during  all  these  years  the  Standard  had  the 
power  to  dictate  the  policy  of  the  Waters  Pierce  or  to 
absorb  it  legally?  You  admit,  do  you  not,  that  the 
Standard  could  have  ousted  Mr.  Pierce  from  the  board 
of  directors,  that  it  could  have  put  its  direct  representa- 
tives in  control,  and  that  Mr.  Pierce  dictated  its  policy 
only  by  fhe  consent  or  tolerance  of  the  Standard?  Very 
well.  There  can  be  no  independence  where  a stronger 
body  has  the  power  to  destroy  or  withhold  it.” 

Indeed!  Then  the  States  have  no  independence  be- 
cause of  the  overshadowing  power  and  authority  of  the 
National  government?  Then  Mexico  is  not  an  inde- 
pendent republic  because  it  is  within  the  power  of  the 
United  States  to  march  an  army  across  its  border,  cap- 
ture its  capital  and  absorb  its  territory  and  people?  Then 
Switzerland  is  not  independent,  because  it  is  powerless- 
to  resist  by  force  the  great  nations  which  surround  it? 

There  are  two  ways  in  which  independence  can  be 
had  and  enjoyed,  namely:  A strong  power  can  win  its  in- 

dependence by  force  and  hold  it  through  fear  of  its  prow- 
ess, and,  second,  a weaker  power  can  secure  a grant  of 
independence  for  any  of  the  possible  reasons  which  may 
impell  its  giving,  and  it  continues  independent  so  long 
as  it  actually  rules  its  own  affairs  and  executes  a dis- 
tinctive policy.  Deny  that  this  second  class  of  independ- 
ence exists  and  you  assert  that  it  will  be  forever  im- 
possible for  the  United  States  to  foster  an  independent 
Cuban  republic. 

DHO  IS  INDEPENDENT? 

The  argument  I am  advancing  is  not  a specious  quib- 
ble invented  for  the  purpose  of  squaring  the  Waters 
Pierce  Oil  company  with  those  who  criticise  it.  Where 
and  what  are  the  independent  business  concerns  in  the 
United  States  today?  I declare  without  hesitancy  that 
[industrial,  commercial  and  financial  independence  in  this 


country  is  almost  a myth.  How  many  individuals  will 
stand  up  and  assert  their  actual  independence?  How  in- 
dependent is  the  grocer,  the  butcher,  the  small  banker, 
the  mechanic,  the  laborer  or  even  the  farmer?  In  a day 
when  practically  every  man  who  would  work  nr  do 
business  must  accept  the  mandate  of  numberless  known 
and  unknown  dictators  “higher  up.”  I take  it  that  there 
is  something  of  humor  in  the  horror  which  certain  par- 
tisans simulate  over  the  disclosure  that  Mr.  Pierce  has 
neglected  to  hurl  himself  against  the  Standard  Oil  com- 
pany and  become  a martyr  in  the  cause  of  oil  inde- 
pendence. 

In  a recent  statement  President  Gary  of  the  United 
States  Steel  corporation  admitted  that  this  vast  com- 
pany had  the  power  to  crush  every  independent  iron 
an4  steel  company  in  the  United  States,  but  added 
that  the  policy  of  the  company  “is  to  permit  the  com- 
petition of  the  weak  concerns  and  to  conserve  their 
independence.”  In  other  words,  he  grants  them  their  “in- 
dependence,” but  it  is  nevertheless  a real  independence, 
though  of  a secondary  grade. 

A EEW  SIMPLE  QUESTIONS. 

In  all  candor  I request  the  reader  to  ask  himself 
what  Mr.  Pierce  should  have  done  when  he  learned  that 
the  majority  of  the  stock  of  his  company  had  passed 
to  the  Standard  Oil  trust.  John  D.  Rockefeller,  the  in- 
dustrial reincarnation  of  Napoleon,  had  conquered  the 
oil  fields,  ruled  the  refineries,  had  humbled  the  railroad 
magnates  and  had  trampled  down  competition.  Pierce 
was  at  the  head  of  a company  which  did  not  produce  one 
gallon  of  oil  in  the  United  States'.  He  did  not  own  or 
operate  a single  refinery  except  in  Mexico.  He  was  mere- 
ly a merchant  of  oil  and  its  products,  a distributing  mid- 
dleman, and  almost  from  the  start  was  compelled  to 
obtain  every  gallon  of  his  supplies  from  those  who  were 
operating  in  the  Eastern  fields. 

Mr.  Pierce  was  a great  man  in  his  own  territory, 
but  he  was  a pigmy  in  the  national  oil  industry  com- 
pared with  Rockefeller.  The  latter  controlled  oil  pro- 
duction, monopolized  refining  and  owned  its  wonderful 
secrets  and  chemical  processes;  the  great  systems  of 
pipe  lines  were  his;  he  had  perfected  a railroad  rebate 
scheme  which  made  competition  impossible,  and,  to  cap 
the  climax,  he  had  acquired,  fairly  or  unfairly,  a major- 
ity interest  in  the  Waters  Pierce  Oil  company.  Under 
such  circumstances,  how  brave  would  you  have  been, 
unbiased  reader,  in  defying  the  Standard  Oil  company? 
Would  you  have  refused  to  merge  your  stock  with  it 
on  the  polite  request  of  the  mighty  Rockefeller.^  Mr. 
Pierce  did. 

Would  you,  a minority  stockholder,  have  insisted 
that  you  be  permitted  to  dictate  the  policy  of  the  com- 
pany? That  surely  was  a nervy  bluff,  but  H.  C.  Pierce 
made  it  and  got  away  with  it.  Would  you  have  gone 
further?  Would  you  have  cut  loose  entirely  from  the 
Standard  and  competed  against  it  with  an  aggressive  and 
defiant  independent  company?  You  could  not  have  used 
the  prestige  of  the  Waters  Pierce,  because  the  Stand- 
ard legally  controlled  that.  From  whom  would  you  have 
bought  your  oil?  Where  would  you  have  raised  the 
money  to  build  huge  refineries?  Who  would  have  dis- 
covered for  you  the  wonderful  processes  then  employed 
by  the  Standard?  How  long  before  the  great  trust  would 
have  crushed  you  as  easily  as  a trip  hammer  does  a 
fly?  You  would  have  been  ruined  in  a few  months. 


ATTITUDE  OF  THE  STANDARD. 

The  truth  of  the  matter  is  that  Mr.  Pierce  demanded 
of  the  Standard  all  that  he  had  a right  to  ask,  and  it 
conceded  more  than  it  was  obliged  to  yield.  I pre- 
sume that  the  Standard  magnates  granted  independence 
to  the  Waters  Pierce  Oil  company  because  they  figured 
that  there  was  more  money  in  yielding  to  Mr.  Pierce 
than  in  opposing  him.  They  were  not  unaware  of  their 
growing  unpopularity.  They  knew  their  might,  but  they 
also  knew  it  would  be  impolite  to  crush  Mr.  Pierce  in  an 
open  way.  He  had  proved  himself  a brave  fighter,  a 
splendid  organizer  and  a merchant  of  rare  genius.  The 
Standard  was  certain  to  secure  a producers’  and  manu- 
facturers’ profit  on  every  gallon  of  oil  sold  to  the  Wa- 
ters Pierce  and  in  addition  to  that  it  was  sure  to  obtain 
66  per  cent  of  the  dividends  earned  by  that  company. 
The  boon  of  independence  was  a small  price  to  pay  for 
peace  and  the  use  of  the  magnificent  organization  reared 
by  Henry  Clay  Pierce,  and  the  Standard  could  well  af- 
ford to  concede  the  terms  demanded  by  that  gentle- 
man. ■ 

I have  no  patience  with  the  childish  criticism  that 
Mr.  Pierce  did  not  take  the  public  into  his  confidence 
and  tell  all  he  knew.  Why  does  not  the  Texas  company 
take  the  public  into  its  confidence?  What  do  you  know 
about  the  actual  ownership  of  the  various  corporations 
you  patronize?  You  do  not  know  even  the  ownership 
of  the  railroads  on  which  you  travel.  Half  of  the  people 
who  dwell  in  cities  do  not  know  who  owns  the  houses 
in  which  they  live.  No  man  of  sense  goes  about  adver- 
tising his  private  business  and  yet  the  people  of  Texas 
have  been  compelled  to  listen  for  years  to  the  senseless 
complaint  that  Mr.  Pierce  did  not  keep  them  posted 
at  all  times  concerning  his  exact  relations  with  a great 
corporation  which  had  stolen  a march  on  him,  and  against 
which  he  was  striving  with  all  his  strength  to  maintain 
the  highest  possible  degree  of  independence. 

This  is  only  one  of  a score  of  ways  in  which  the 
W’aters  Pierce  Oil  company  and  its  head  are  singled  out 
for  special  criticism  and  abuse.  This  is  not  fair,  it  is  not 
honest,  and  the  time  will  come  when  the  motives  back 
of  these  inspired  attacks  will  be  thoroughly  understood, 
and  when  the  plain  people  of  Texas  will  know  that  they 
burned  their  fingers  in  pulling  out  of  the  fire  chestnuts 
which  others  devour. 

WHEN  TROUBLE  CAME. 

You  may  be  sure  that  the  Standard  Oil  company  did 
Its  best  to  make  all  the  money  it  could  out  of  the  people 
of  the  Southwest.  You  ma}  be  sure  that  the  Waters 
Pierce  Oil  company  was  not  conducted  as  a charitable 


institution.  You  may  rest  assured  that  no  private  corpo- 
ration ever  was  conducted  for  the  benefit  of  the  dear  pub- 
lic, and  you  may  take  my  word  for  it  that  this  same  dear 
public  will  pay  more  than  things  are  worth  until  voters 
havQ  more  sense  than  they  now  have.  During  all  this 
uproar  I cannot  find  that  one  public  official  has  even 
attempted  to  suggest  a plan  by  Which  the  “people”  are 
to  get  cheaper  oil.  Perhaps,  however,  the  triumph  of 
the  “Bailey”  or  “anti-Bailey”  faction  is  of  more  conse- 
quence to  the  future  greatness  of  Texas  than  the  trifling 
detail  of  whether  it  will  have  a cheaper  oil  or  no  oil 
at  all. 

I regret  that  I can  not  write  an  accurate  history 
of  what  happened  in  the  offices  of  the  Standard  Oil  com- 
pany when  the  news  came  that  the  Supreme  Court  of 
the  United  States  had  decreed  the  expulsion  of  the 
original  Waters  Pierce  Oil  company  from  Texas.  It 
probably  never  will  be  written,  at  least  not  all  of  it,  but 
certain  facts  are  obvious,  others  are  spread  on  little 
known  legal  records,  and  other  facts  have  come  to  me 
from  various  sources.  I will  first  state  the  obvious 
facts. 

The  expulsion  of  the  original  Waters  Pierce  Oil  com- 
pany from  Texas  came  as  a surprise  to  the  Standard  Oil, 
as  it  did  to  all  those  connected  with  the  litigation,  but 
it  did  not  catch  the  great  combine  napping.  Mr.  Pierce 
had  confined  his  operations  strictly  to  his  original  ter- 
ritory, but  this  did  not  prevent  the  Standard  fr^m  en- 
couraging competition  in  that  territory.  That  is  official. 
It  has  been  proved  that  during  all  these  years,  the 
Standard  fostered  alleged  independent  companies  which 
harassed  the  Waters  Pierce  in  Missouri  and  the  South- 
west. I do  not  pretend  to  say  just  why  the  oil  trust  did 
this.  The  ways  of  the  Standard  are  beyond  the  ken  of 
average  mortals,  but  we  do  know  that  it  never  keeps  all 
of  its  eggs  in  one  basket,  and  it  i^  quite  likely  that  Mr. 
Rockefeller  looked  forward  to  a day  when  the  Waters 
Pierce  might  get  into  trouble,  or  when  it  might  be  ad- 
visable to  extinguish  its  independence. 

Therefore  the  Standard  kept  substitutes  in  training. 
It  is  whispered  that  certain  of  these  substitutes  are  in 
very  active  training  right  now,  and  that  they  will  be  able 
to  take  over  the  entire  business  of  the  Waters  Pierce  Oil 
company,  in  the  event  that  the  higher  courts  affirm  the 
verdict  rendered  last  summer  in  Austin. 

The  position  assumed  by  the  Standard  oil  company  in 
this  crisis  is  so  interesting  and  important  that  it  should  be 
considered  in  a connected  narrative,  and  in  the  next  chap- 
ter I will  present  the  scattered  facts  and  obvious  surmises 
which  have  come  to  us  from  the  carefully  guarded  con- 
ferences held  in  that  mysterious  building,  26  Broadway. 


Chapter  Xlll. 

MR.  H.  C.  PIERCE  AND  THE  STANDARD 


There  is  no  law  in  Texas  against  the  sale  of  Standard 
Oil  products  within  its  borders,  there  never  has  been, 
and  there  never  will  be  so  long  as  the  present  Constitu- 
tion of  the  United  States  is  in  existence.  Doubtless  this 


statement  will  surprise  many  readers  whose  information 
on  this  subject  has  been  derived  from  the  eloquence  of 
political  orators  and  from  partisan  editorials,  but  you 
may  accept  it  as  a fact  that  no  State  has  the  power  to 


—34— 


override  the  interstate  commerce  clause  contained  in  our 
Federal  Constitution. 

Texas  can  impose  any  reasonable  restrictions  she 
chooses  on  her  own  or  on  outside  corporations,  but  she 
cannot  exclude  a useful  commerce  commodity  from  her 
_limits.  Texas  can  exclude  trusts,  but  she  cannot  ex- 
clude a trust-made  product.  You  or  I or  any  other  in- 
dividual can  purchase  any  commodity  produced  by  the 
most  vicious  trust,  can  ship  it  into  Texas,  use  it,  sell  it 
or  give  it  away,  and  no  law  passed  by  the  Texas  legis- 
lature can  interfere  with  us.  By  the  same  token,  any 
duly  chartered  corporation,  provided  with  a Texas  per- 
mit. can  purchase  from  the  Standard  Oil  company  any 
of  its  products,  ship  them  into  the  State  and  sell  them — 
provided,  of  course,  that  such  corporation  does  not  vio- 
late the  anti-trust  laws  of  Texas  in  such  sales. 

The  point  is  this:  Texas  cannot  inquire  into  the  source 
from  which  an  individual  or  a corporation  obtains  his  or 
its  supplies  She  may  know  or  suspect  that  the  Whiting, 
Ind..  and  Bayonne,  N.  J.,  oil  refineries  are  owned  by  a 
trust.  She  may  bar  that  trust  from  operating  in  Iver  lim- 
its, but  she  cannot  bar  vaseline  and  oils,  and  her  mer- 
chants have  as  much  right  to  patronize  the  Standard  as 
they  have  to  buy  these  necessities  elsewhere.  Keep  this 
in  mind,  because  it  is  not  only  the  law,  but  it  is  com- 
mon sense,  and  it  has  all  to  do  with  the  issue  now  under 
discussion. 

SCOPE  OF  THE  ST.VYDARD  OIL  COMPANY. 

The  Standard  Oil  trust  is  the  most  protentous  men- 
ace which  ever  confronted  our  nation.  With  the  profits 
extorted  from  the  monopolization  of  a great  natural  prod- 
uct as  a basis,  a clique  of  men  has  seized  eontrol  of  the 
strategic  wealth  of  the  nation.  Massed  in  their  hands  art 
banks,  railroads,  vast  manufacturing  industries,  newspa- 
pers, universities — a stupendous  engine  fed  by  gold  and 
directed  by  brain  and  influence — and  we  must  conquer 
it  or  be  conquered  by  it. 

How  shall  we  begin?  Shall  the  separate  States  de- 
cree by  law  that  no  Standard  Oil  product  shall  be  sold 
in  their  limits?  Such  a remedy  is  not  only  childish,  but 
impossible.  In  the  first  place,  it  is  illegal;  in  the  second 
place,  its  enforcement  would  precipitate  a calamity.  Blot 
from  existence  today  the  property  and  the  products  of  the 
Standard  Oil  company  and  you  will  set  our  civilization 
back  ten  or  twenty  years.  The  average  man  assumes 
.that  this  trust  depends  for  its  profits  on  its  control  of 
kerosene,  lubricating  oils,  vaseline  and  a few  other  prod- 
ucts with  which  he  is  more  or  less  familiar.  He  does 
not  know  that  it  extracts  from  crude  petroleum  more  than 
2,500  valuable  and  now  indispensable  products.  There  are 
dyes,  drugs,  waxes  wtihout  number,  chemicals  used  in 
the  arts  and  sciences  and  a bewildering  series  of  extrac- 
tions known  only  to  those  who  have  spent  their  lives  in 
this  wonderful  study. 

Bar  these  from  Texas  and  you  will  wipe  the  State 
off  the  industrial  map.  No,  my  impatient  friend,  you 
must  go  about  this  reform  in  some  other  way.  There  is 
no  doubt  that  Texas  is  a great  State  and  it  is  a settled 
fact  that  she  can  do  wonderful  things  by  law,  but  it  is 
my  candid  opinion  that  the  curbing  of  the  Standard  Oil 
company  is  a job  for  Uncle  Sam  to  tackle,  and  the  soon- 
er he  takes  his  coat  off  and  goes  about  it,  the  better  it 
will  be  for  all  concerned.  While  he  is  about  it  the  trust 
must  be  permitted  to  continue  to  produce  the  commodi- 
:ies  which  are  now  a part  of  our  civilization.  The  Whit- 
ng  refinery  is  all  right;  Bayonne  is  all  right;  vaseline 
s a good  thing  to  have  about  the  house;  we  should  dis- 


like to  see  our  oil  cans  permanently  empty — let’s  keep 
all  these  excellent  things  and  at  the  same  time  get  after 
the  Rockefeller  crowd  and  fight  it  intelligently. 

SCOPE  OF  WATERS  PIERCE  OIL  COMPANY. 

At  the  time  of  the  expulsion  of  the  original  Waters 
Pierce  Oil  company  from  Texas  it  was  buying  most  of 
its  supplies  from  the  Standard.  It  was  compelled  to  do 
this.  No  producer  other  than  the  Standard  could  have 
supplied  it  with  the  quantity  required  to  meet  the  de- 
mands of  the  Southwest.  Even  had  Mr.  Pierce  owned  all 
of  the  stock  of  the  first  Waters  Pierce  Oil  company  he 
would  still  have  been  compelled  to  purchase  from  the 
Standard  Oil  trust. 

Let  us  study  the  situation  for  a moment.  Mr.  Pierce 
owned  1,250  shares  of  the  original  Waters  Pierce  Oil 
company  out  of  4,000,  the  Standard  owned  the  remain- 
ing 2,750.  Therefore,  Mr.  Pierce  was  entitled  to  and  re- 
ceived nearly  one-third  of  the  profits.  You  may  be  sure 
that  the  Standard  did  not  relish  the  continuance  of  any 
such  arrangement,  and  that  it  repeatedly  attempted  to 
buy  out  Mr.  Pierce  or  tried  to  reduce  his  holdings. 

It  naturally  follows  that  the  Standard  would  not  dis- 
criminate in  favor  of  the  Waters  Pierce.  The  merest 
novice  in  business  can  understand  that  the  Standard  would 
charge  the  Waters  Pierce  the  highest  possible  price  for 
oil.  That  policy  enhanced  its  first  profit,  and  it  divided 
this  with  no  one.  Mr.  Pierce  naturally  contended  for  the 
lowest  possible  price,  and  undoubtedly  many  were  the 
conflicts  between  him  and  the  sales  department  of  the 
trust.  Having  made  the  best  terms  possible  for  the  pur- 
chase of  his  supplies  he  then  was  compelled  to  make  a 
retail  profit,  two-thirds  of  which  went  into  dividends  to 
the  Standard. 

The  trust  wanted  more.  It  always  wants  more,  but, 
in  this  instance,  it  hesitated  to  reach  for  it.  Why?  Be- 
cause it  feared  to  attack  Mr.  Pierce.  He  was  the  pioneer 
in  the  Southwestern  field;  he  knew  every  foot  of  the 
ground,  and  in  an  open  conflict  he  would  have  had  the 
sympathy  and  support  of  the  people. 

FEAR  OF  THE  PEOPLE. 

The  Standard  has  a wholesome  respect  for  the  peo- 
ple of  Texas  and  the  Southwest — a respect  mingled  with 
fear.  So  long  as  Mr.  Pierce  was  compelled  to  share  the 
odium  of  an  enforced  connection  with  the  Standard  Oil 
company,  the  latter  was  not  in  danger,  but  to  crush  him 
openly  would  precipitate  an  entirely  different  crisis. 
Therefore  the  Standard  yielded  to  the  demands  made  by 
Mr.  Pierce,  and  reluctantly  permitted  him  to  draw  one- 
third  of  the  retail  earnings.  It  took  the  balance,  and 
all  of  the  wholesale  profits. 

Probably  the  Standard  Oil  magnates  were  of  the 
opinion  that  Mr.  Pierce  was  a man  of  great  political  in- 
fluence in  Missouri,  Texas  and  in  most  of  territory  cov- 
ered by  his  company.  I do  not  know  how  they  obtained 
this  .idea — for  Mr.  Pierce  knows  little  and  cares  less  about 
practical  politics — but  the  evidence  is  conclusive  that  26 
Broadway  regarded  Mr.  Pierce  as  one  in  a position  to 
pull  the  wires  and  command  the  influence  required  to  per- 
petuate the  Waters  Pierce  Oil  company  in  the  South- 
west for  an  indefinite  period. 

They  were  disillusioned  wlien  his  company  was  oust- 
ed from  Texas.  Their  lawyers  assured  them  that  the 
mandate  of  the  Supreme  Court  of  the  United  States  was 
final,  and  that  the  Waters  Pierce  Oil  company  could  nev- 
er obtain  another  permit  to  do  business  in  Texas.  This 
greatly  reduced  the  territory  of  one  of  their  largest  custo- 


—35— 


mers.  Mr.  Pierce  had  developed  an  enormous  business  in 
the  Republic  of  Mexico,  and  purchased  practically  all  of 
his  supplies  for  serving  it  from  the  Standard.  The  elim- 
ination of  Texas  left  a gap  in  the  oil  map.  It  seemed  sure 
that  other  states  would  follow  the  example  set  by  the 
Lone  Star  state.  It  was  a bad  mess. 

“A  DEAD  COCK  IIV  THE  PIT” 

So  far  as  the  interests  of  the  Standard  Oil  company 
were  concerned,  Mr.  Pierce  might  just  as  well  have  been 
bankrupt  in  Texas.  He  was  seemingly  out  of  it.  True, 
he  had  been  a good  customer  and  a good  dividend  earner, 
but  he  was  “a  dead  cock  in  the  pit.”  Texas  had  killed 
him.  Probably  the  Standard  officials  wept  no  bitter  and 
scalding  tears  over  his  assumed  fate.  He  had  drawn 
in  dividends  a very  considerable  sum  which,  under  other 
circumstances,  would  have  gone  into  the  treasury  of  the 
Standard.  He  was  the  one  man  who  had  forced  the  great 
trust  to  recognize  the  independence  of  a distributing  oil 
company.  His  territory  was  disrupted,  his  prestige  im- 
paired, and  his  future  ruined — thus  argued  the  wise  men 
in  conference  at  26  Broadway. 

They  were  in  ^this  mood  when  Mr.  Pierce  came  to 
New  York  to  confer  with  them.  This  was  after  Mr. 
Bailey  had  rendered  his  “valuable  services  in  behalf  of 
the  Waters  Pierce  Oil  company,”  consisting  of  a brief 
conference  with  Secretary  of  State  Hardy  and  Attorney 
General  Smith,  who  assured  Mr.  Bailey  that  there  was 
absolutely  no  way  in  which  the  old  and  dead  company 
could  be  reinstated  in  Texas — which  cheerful  news  the 
Congressman  imparted  to  Mr.  Pierce,  and  then  went  to 
Washington  to  attend  to  his  duties,  and  took  no  further 
part  in  the  developments  which  followed.  It  is  true  that 
Mr.  Bailey  suggested  that  it  might  be  possible  to  or- 
ganize a Texas  corporation  to  take  over  and  conduct 
the  business  of  the  oil  company  in  that  state,  but  this 
had  already  been  considered  by  Mr.  Pierce  and  his  law- 
yers, and  had  been  urged  by  Attorney  General  Smith, 
as  I have  previously  explained  and  proved.  This  was  ob- 
viously a possible  alternative,  one  which  a legal  fledgling 
might  have  mentioned,  and  it  is  as  contemptible  to  score 
Joe  Bailey  for  suggesting  it  as  it  would  be  laughable 
to  give  him  credit  for  marked  perspicuity. 

THE  NEW  YORK  CONFERENCE. 

Now  I am  not  going  to  tell  just  what  Mr.  Pierce 
said  to  the  Standard  Oil  executives  in  this  New  York 
conference,  or  what  they  said  to  him,  for  the  very  ex- 
cellent reason  that  I personally  know  nothing  about  it, 
but  I do  know  that  Mr.  Pierce  had  discovered  that  it 
was  possible  to  dissolve  the  old  Waters  Pierce  Oil  com- 
pany in  Missouri,  where  it  was  incorporated,  and  to  or- 
ganize a new  Waters  Pierce  Oil  company  in  the  same 
State.  This  contemplated  procedure  was  based  on  a 
Missouri  law  which  permitted  a solvent  company  to  be 
dissolved  by  unanimous  consent  of  its  stockholders.  Any 
other  way  involved  the  appointment  of  a receiver  and 
endless  complications,  including  indefinite  disbarment 
from  Texas. 

I do  not  know  if  Mr.  Pierce  revealed  this  plan  to  the 
Standard  officials.  Between  the  lines  of  the  printed  rec- 
ords of  the  testimony  later  given  by  Mr.  Pierce  and  oth- 
ers, it  is  not  difficult  to  discern  the  motives  which  swayed 
the  two  interested  parties  at  the  critical  time.  This  I be- 
lieve; there  never  was  a'  day,  from  the  date  that  the 
Standard  Oil  company  secured  control  of  the  majority 
of  the  stock  of  the  Waters  Pierce  Oil  company,  that  it 
was  not  the  fixed  ambition  of  Henry  Clay  Pierce  to  re- 


gain control.  His  every  act  has  proven  this.  Pride,  in- 
tense love  of  independence,  caution,  judgment,  self-inter- 
est— every  consideration  impelled  him  to  strive  for  com- 
plete control  of  the  great  company  to  which  he  had  de- 
voted a life  of  effort. 

Better  than  any  other  man,  Henry  Clay  Pierce  re- 
alized the  danger  which  lurked  in  this  enforced  alliance 
with  the  Standard  Oil  company,  and  I believe  that  more 
than  any  other  man  he  was  anxious  to  terminate  it. 

“He  could  have  terminated  it  easily  enough,”  ob- 
serves my  critic.  “Admitting  that  the  Standard  refused 
to  yield  control  does  not  excuse  Mr.  Pierce.  If  he  was 
actually  anxious  to  break  entirely  away  from  the  trust, 
he  would  doubtless  have  found  it  ready  to  pay  him  a fair 
price  for  his  holdings.” 

This  observation  has  been  made  a thousand  times. 

I care  nothing  for  the  opinion  of  the  few  timid  ones  who 
honestly  advance  this  plea,  and  I have  only  contempt 
for  those  hypocrites  who  smugly  voice  it.  No  man  with 
blood  in  his  veins  would  shirk  the  fight  which  was  forced 
on  Mr.  Pierce.  Some  energetic  philosopher  has  declared 
that  “God  Almighty  hates  a quitter,”  and  those  who  think 
likewise  must  pay  a tribute  of  respect  to  this  man  who 
still  stands  by  his  guns.  It  was  Mr.  Pierce’s  right  to  re- 
fuse to  let  the  Standard  eliminate  liim  from  the  oil  busi- 
ness, and  it  is  still  his  right  to  defend  himself  with  every 
weapon  provided  and  authorized  by  law. 

THE  STANDARD  READY  TO  QUIT. 

As  I have  said,  the  Standard  Oil  magnates  had  lost 
much  of  their  faith  in  the  future  usefulness  of  the  Waters 
Pierce  Oil  company  as  their  customer  in  Texas.  Its 
stock  no  longer  seemed  like  a profitable  investment. 
Therefore  they  were  in  a mood  to  consider  the  proposi- 
tions which  Mr.  Pierce  had  to  offer,  namely,  that  the 
Standard  Oil  company  would  part  absolutely  with  its 
holdings  in  the  Waters  Pierce. 

Not  until  the  men  who  participated  in  this  con 
ference  choose  to  make  public  just  what  took  place  will  , 
it  be  possible  for  the  historian  to  work  on  reliable  data. 
There  are  certain  things  which  we  do  know,  and  all  of 
them  point  to  the  conclusion  that  Henry  Clay  Pierce 
was  in  absolute  control  of  the  situation  when  the  old 
Waters  Pierce  Oil  company  was  dissolved,  and  also  that 
his  absolute  domination  was  unquestioned  when  the  new  . 
Waters  Pierce  Oil  company  was  incorporated  in  Missouri  ; 
and  Texas. 

There  are  two  explanations  given  of  what  took  place 
at  the  New  York  conference,  and  men  can  honestly  hold 
to  either  of  them.  The  theory  which  has  been  most  per- 
sistently and  at  times  unfairly  advanced  in  Texas  is  that 
Mr.  Pierce  conspired  with  the  Standard  officials,  and  that 
a plan  was  carefully  matured  for  the  deception  of  the  peo- 
ple of  Texas.  The  other  theory  is  that  Mr.  Pierce  sin- 
cerely believed  that  he  had  made  terms  which  permanent- 
ly eliminated  the  Standard  Oil  company,  and  that  he  was 
deceived  in  so  thinking. 

Those  who  hold  that  Mr.  Pierce  conspired  for  the 
joint  benefit  of  the  Standard  Oil  company  and  himself 
must  predicate  their  belief  on  the  assumption  that  he  was 
a stupid  and  reckless  fool  with  criminal  instincts.  They 
must  fly  in  the  face  of  the  fact  that  he  was  a brilliant 
executive,  progressive,  but  conservative,  spotless  in  repu- 
tation and  extremely  proud  and  jealous  of  his  Jionor.  I 
ask  any  reasoning  man  to  explain  how  it  happened  that 
a man  thus  constituted,  a man  who  for  years  had  been 
ambitious  to  regain  control  which  had  been  wrested  from 
him— how  it  happened  that  this  cultured  man  of  millions 


— 3R— 


willingly  became  the  catspaw  of  the  Standard  Oil  com- 
pany in  a conspiracy  intended  to  perpetuate  its  dominion 
over  him  and  the  company  which  bore  his  name? 

WHAT  HAD  MR.  PIERCE  TO  GAIM 

Do  you  think  that  Henry  Clay  Pierce  would  have 
volunteered  such  artifices  for  the  purpose  of  insuring  to 
the  Standard  company  its  continued  dividends  on  two- 
thirds  of  the  stock  of  the  Waters  Pierce  Oil  company? 
He  was  not  called  on  to  make  the  move.  The  legal  pro- 
cedure for  the  dissolution  of  the  old  company  and  the 
incorporation  of  a new  one  had  been  ascertained  and  did 
not  need  his  initiative  in  any  of  their  details.  He  was 
not  the  president  of  the  old  company,  and  it  was  not 
necessary  that  he  should  place  himself  at  the  head  of  the 
new  one — assuming  that  the-  conspiracy  would  save  his 
interests  jointly  with  those  of  the  Standard  Oil  com- 
pany. 

In  the  first  place,  Mr.  Pierce  would  not  have  entered 
into  any  conspiracy  to  save  the  interests  of  the  Stan- 
dard. In  the  second  place — admitting  for  the  sake  of 
argument  that  he  could  have  repudiated  his  life-long  am- 
bition— he  would  have  been  cautious  enough  to  remain 
in  the  background. 

WHAT  ACTUALLY  HAPPENED. 

Mr.  Pierce  returned  to  St.  Louis  after  his  conference 
with  the  Standard  Oil  officials.  May  27,  1900,  there  was 

held  a meeting  of  the  stockholders  of  the  Waters  Pierce 
Oil  company.  In  this  meeting  Mr.  Pierce  held  person- 
ally or  by  proxy  every  share  of  the  stock  of  the  Waters 
Pierce  Oil  company,  and  voted  every  share  in  the  affirm- 
ative on  the  motion  for  the  dissolution  of  the  company. 
He  was  legally  authorized  to  make  an  appraisal  of  the 


assets  of  the  company,  to  buy  them  in,  and  to  award 
the  actual  owners  of  the  stock  their  just  proportion  from 
such  sale. 

What  did  this  mean?  It  meant  that  the  great  Stan- 
dard Oil  company  had  placed  its  interest  in  the  Waters 
Pierce  Oil  company  absolutely  at  the  mercy  of  Henry 
Clay  Pierce.  The  old  company  died  when  he  cast  the 
votes  in  favor  of  its  dissolution.  The  oil  trust  received 
from  Mr.  Pierce  in  cash  and  ’notes  its  full  proportion  of 
the  value  of  its  assets.  They  were  out  of  it.  They  had 
no  more  legal  interest  in  the  Waters  Pierce  Oil  company 
than  they  have  in  my  house.  The  alliance  terminated 
with  the  dissolution  of  the  original  Waters  Pierce  Oil 
company. 

What  next  happened?  A new  Waters  Pierce  Oil 
company  was  formed  with  a capital  stock  of  $400,000,  of 
which  Henry  Clay  Pierce  subscribed  for  every  share  at 
par,  paying  into  the  treasury  of  the  company  his  per- 
sonal check  on  the  Fourth  National  Bank  of  St.  Louis 
for  $400,000,  which  check  was  duly  honored  at  the  bank 
and  the  St.  Louis  clearing  house.  Mr.  Pierce  transferred 
four  shares  of  stock,  one  to  each  of  the  four  men  whom 
he  elected  as  directors  in  the  new  Waters  Pierce  Oil 
company,  retaining  the  remaining  3,996  shares.  Such  was 
the  status  of  affairs  when  application  was  made  in  Austin 
for  a permit  to  do  business  in  Texas. 

There  is  no  question  that  Mr.  Pierce  was  then  legally 
free  of  any  alliance  with  the  Standard  Oil  company.  The 
latter  had  consented  to  dissolution,  it  had  received  money 
for  its  holdings  in  the  old  company,  and  it  owned  not 
one  share  of  stock  in  the  new  company,  nor  did  it  have 
the  slightest  legal  claim  against  the  corporation  which 
was  organized  May  29,  1900,  and  May  31,  1900,  licensed  to 
transact  business  in  Texas. 


Chapter  XIV. 

WHICH  EXPOSES  A FAMILIAR  FALSEHOOD 


May  29,  1900,  Henry  Clay  Pierce  was  in  absolute  con- 
trol of  the  situation.  He  was  president  and  total  owner 
of  the  newly  incorporated  Waters  Pierce  Oil  company, 
and  in  his  pocket  was  the  charter  granted  by  the  State 
of  Missouri.  For  the  first  time  in  eighteen  years  he  was 
not  corporately  associated  with  the  Standard  Oil  com- 
pany. It  did  not  own  one  share  of  the  new  company  and 
there  was  no  legal  method  by  which  it  could  force  him 
to  part  with  any  portion  of  the  stock  for  which  he  had  paid 
its  par  value.  There  were  other  reasons  which  later  im- 
pelled Mr.  Pierce  to  yield  to  certain  demands  made  by 
the  Standard  Oil  company,  and  these  will  be  considered, 
but  there  is  convincing  proof  that  he  was  legally  inde- 
pendent when  he  applied  for  a Texas  permit  in  Austin. 

Immediately  on  the  receipt  of  the  Missouri  incorpora- 
tion papers,  Mr.  Pierce  and  his  leading  counsel,  J.  D. 
Johnson,  hastened  to  Austin.  It  had  been  falsely  stated 
a thousand  times  that  Congressman  Bailey  was  with  them 
and  that  it  was  through  his  pleadings  and  influence  that 
the  company  was  readmitted  into  Texas.  Let  me  again 
remind  those  who  are  looking  for  the  trust,  that  Mr. 
Bailey  was  not  with  Mr.  Pierce  and  Mr.  Johnson  on  this 

—3 


iii.portaiU  occasion.  He  was  in  Washington  attending  to 
his  duties  in  congress.  He  had  not  been  in  Texas  for 
more  than  three  weeks,  he  had  not  been  in  .\ustin  for 
a month,  and  he  had  not  been  advised  of  the  Waters  Pierce 
plans  then  in  progress  of  execution.  It  is  too  much  to 
hope  that  this  reiteration  of  a palpable  fact  will  kill  this 
particular  falsehood. 

Mr.  Pierce,  Mr.  Johnson  and  Judge  George  Clark  of 
Waco  called  on  the  Texas  state  officials  during  the  fore- 
noon of  May  31.  More  than  a month  prior  to  this,  and 
at  the  time  when  Senator  Bailey  rendered  his  alleged 
services  to  the  old  Waters  Pierce  Oil  company  in  Aus- 
tin, Mr.  Pierce  had  a conference  with  Attorney  General 
T.  S.  Smith.  During  -their  talk  the  question  of  dissolv- 
ing the  old  company  and  of  organizing  a new  one  was 
considered.  The  attorney  general  strongly  urged  upon 
Mr.  Pierce  that,  if  such  steps  were  taken — which  then 
seemed  inevitable — that  he  organize  the  new  company  in 
Texas.  This . frank  and  ruggedly  honest  official  argued 
that  the  company  would  gain  popularity  in  Texas  by  mak- 
ing that  State  its  official  home. 

Mr.  Pierce  explained  that  there  were  cogent  reasons 


why  a new  company  should  retain  its  original  Missouri 
headquarters,  but  agreed  to  give  the  suggestion  of  the  at- 
torney general  careful  consideration. 

Compare  this  authenticated  interview  with  the  re- 
tierated falsehood  that  the  Waters  Pierce  Oil  company 
sneaked  back  into  Texas  through  fraud,  that  it  “stole  a 
march”  on  the  officials,  and  that  Senator  Bailey  acted 
as  the  go-between. 

ORA>TI>G  THE  PERMIT. 

Mr.  Pierce  and  his  lawyers  were  sure  of  their  ground 
when  they  came  to  Austin  a month  later.  May  31,  1900. 
They  were  not  begging  for  admission  into  Texas.  They 
were  not  supplicants  for  the  favors  of  the  Texas  state 
officials.  Back  of  them  stood  the  Constitution  of  the 
United  States  and  the  numberless  decisions  of  competent 
courts.  They  w'ere  in  no  need  of  the  influence  of  services 
of  Senator  Bailey  or  of  any  other  public  official.  They 
were  in  Austin  demanding  that  the  new  company  be 
granted  a permit.  The  attorney  general  and  the  secre- 
tary of  state  were  fully  aware  that  they  had  no  discre- 
tion in  the  matter.  It  was  their  sworn  duty  to  give  credit 
to  the  official  acts  of  a sister  and  a sovereign  State,  and  to 
grant  the  permit. 

Read  the  last  paragraph  again.  It  contains  nothing 
but  the  truth,  and  I defy  my  critics  to  pick  one  flaw  in 
its  blunt  declarations.  Now  compare  them  with  what 
you  have  been  educated  to  believe.  Compare  them  with 
the  familiar  untruth  that  Joseph  W.  Bailey  was  there  in 
Austin  with  $3,300  of  Mr.  Pierce’s  money  in  his  pocket, 
and  that  he  persuaded  Tom  Smith  and  Secretary  of  State 
Hardy  to  prove  recreant  to  their  trusts.  Now  that  you 
know  the  truth,  what  do  you  think  of  the  men  who  have 
purposely  deceived  you?  What  has  been  their  motive? 
They  had  one.  Who  was  to  gain  thereby?  There  is  an 
■obvious  answer. 

When  informed  by  Mr.  Pierce  that  a new  Waters 
Pierce  Oil  company  had  been  incorporated,  Attorney  Gen- 
eral Smith  seemed  pleased.  He  assumed  that  his  advice 
had  been  taken,  and  that  the  company  had  obtained  its  ■ 
charter  in  Texas. 

“Wait  until  you  read.  General  Smith,”  Mr.  Pierce 
suggested,  handing  him  the  certification  of  incorporation. 
The  attorney  general  took  one  glance  at  the  papers  and 
saw  the  great  seal  of  the  State  of  Missouri.  An  expres- 
sion mingled  of  sorrow,  disappointment  and  anger 
showed  in  his  face. 

"You  have  ruined  me  politically,  Mr.  Pierce!”  he  ex- 
exclaimed.  “This  is  a Missouri  charter.  The  people  of 
Texas  do  not  understand  the  legal  technicalities  at  issue, 
and  will  blame  me  and  hold  me  personally  responsible 
if  a permit  is  granted.  If  I can  find  any  shadow  of  law 
to  keep  you  out  of  Texas  I will  apply  it.” 

He  found  no  such  law,  for  the  simple  reason  that 
there  was  none.  The  fruitless  search  ended.  Attorney 
General  Smith  reluctantly  advised  Secretary  of  State 
Hardy  that  the  statutes  compelled  the  granting  of  the 
permit.  The  papers  were  prepared  and  turned  over  to 
Mr.  Pierce.  The  new  Waters  Pierce  Oil  company  was 
from  that  moment  legally  authorized  to  transact  busi- 
ness in  Te.xas. 

THE  FAMOUS  AFFIDAVIT. 

The  favorite  stock  falsehood  of  the  syndicate  which 
seeks  popular  favor  by  inventing  “crimes”  and  laying 
them  at  the  door  of  Mr.  Pierce  and  his  company,  is  about 
as  follows;  It  is  charged  that  the  state  officials  of  Texas 
granted  Mr.  Pierce  a permit  because  he  signed  a specially 


prepared  affidavit  in  which  he  specifically  swore  that  the 
Waters  Pierce  Oil  company  had  no  connection  with  or  re- 
lation to  the  Standard  Oil  company,  and  that  upon  the 
signing  of  this  affidavit  and  because  of  it,  the  permit  was 
granted. 

This  fiction  does  not  agree  with  the  other  stock 
falsehood  to  the  effect  that  Senator  Bailey  sneaked  the 
company  into  Texas,  but  that  is  a trifling  inconsistency 
for  certain  of  those  who  are  engaged  in  this  campaign. 

Here  are  the  facts:  It  was  not  necessary  for  Mr. 

Pierce  or  anyone  else  to  sign  any  affidavit  to  any  form, 
kind  or  description  in  order  to  obtain  a permit  for  the 
new  Waters  Pierce  Oil  company  in  Texas.  This  famous 
affidavit  was  an  integral  part  of  the  Texas  anti-trust  law 
of  1899.  It  was  a blank  form,  designed  by  some  mem- 
ber of  the  legislature  to  me  unknown,  and  doubtless  mod- 
ified in  committee,  was  later  made  a part  of  the  act,  duly 
passed  by  both  houses  of  the  legislature  and  signed  by 
the  governor  of  the  state.  The  public  printer  then  pro- 
vided the  secretary  of  state  with  blank  copies  of  these 
affidavits.  The  law  of  1899  specifies  in  section  8,  as  fol- 
lows : 

“It  shall  be  the  duty  of  the  secretary  of  state,  on 
or  about  the  first  day  of  July  of  each  year,  and  at  such 
other  times  as  he  shall  deem  necessary,  to  address  to 
the  president,  secretary  or  treasurer  of  each  incorporated 
company  doing  business  in  this  State  a letter  of  inquiry 
as  to  whether  the  said  corporation  has  all  or  any  part 
of  its  business  or  interest  in  or  with  any  trust,  combina- 
tion or  association  of  persons  or  stockholders,  as  named 
in  the  preceding  provisions  of  this  act,  and  to  require 
an  answer  under  oath  of  the  president,  secretary  or  treas- 
urer, or  any  director  of  said  company.  A form  of  g,ffida-, 
vit  shall  be  enclosed  in  said  letter  of  inquiry,  as  follows:” 

Then  follows  the  affidavit,  which  I shall  consider 
later. 

WHAT  ACTUALLY  HAPPEIVED. 

I am  not  quoting  from  some  newspaper  clipping. 
The  above  citation  is  not  an  extract  from  the  political 
speech  of  some  designing  demagogue.  I have  quoted  the 
law;  I have  cited  the  facts;  I have  placed  before  you  the 
unquestioned  legal  record  as  contained  in  the  statutes 
of  the  state  of  Texas,  and  I shall  brand  this  particular  af- 
fidavit lie  so  deep  that  the  accusation  that  I am  paid 
for  telling  the  truth  will  not  efface  the  scar  for  a month 
or  two. 

Mr  Pierce  could  not  have  signed  the  affidavit  before 
the  permit  was  granted — at  least,  such  a signing  would 
have  been  farcical.  The  corporation  did  not  exist  in 
Texas  until  the  permit  had  been  granted.  No  member 
of  the  corporation  had  to  sign  the  affidavit  until  July  1. 
More  than  that,  it  was  not  obligatory  on  Mr.  Pierce  to 
sign  it  at  any  time.  Any  officer  or  director  would  have 
served  the  purposes  of  the  law  exactly  as  well,  and  it  is 
a matter  of  fact  that  at  a later  date  J.  P.  Gruet  signed 
the  same  affidavit — for  which  “crime,”  by  the  way,  he  has 
never  been  called  to  account  in  any  manner  known  to 
the  public. 

Here  is  what  happened  in  the  office  of  the  secretary 
of  state  of  Texas  in  Austin,  that  afternoon  in  May  31, 
1900;  The  permit  had  been  granted,  Mr.  Pierce  and  his 
associates  had  chatted  with  the  various  officials  present 
and  were  about  to  leave  the  building  when  some  assist- 
ant or  clerk  .attached  to  Secretary  Hardy’s  department 
approached  with  a blank  copy  of  the  affidavit  and  sug- 
gested that  Mr.  Pierce  sign  it. 


—38— 


The  latter  read  it  and  handed  it  to  his  lawyers.  They 
examined  it  and  stated  that  while  the  law  did  not  contem- 
plate that  he  should  sign  it  at  that  time— or  at  any  time, 
for  that  matter — that  there  was  no  reason  why  he  should 
not  place  his  name  to  it.  It  was  filled  in,  and  Mr.  Pierce 
signed  it.  There  was  no  mention  of  the  Standard  Oil 
company  or  of  any  other  company — there  was  no  place 
where  such  a detail  could  have  been  inserted.  I now 
quote  from  this  much  discussed  affidavit  its  essential 
declaration; 

-AFFIDAVIT. 

"The  State  of  Texas,  County  of  Travis:  I,  Henry 

Clay  Pierce,  do  solemnly  swear  that  I am  president  of 
the  corporation  known  and  styled  Waters  Pierce  Oil 
Company,  duly  incorporated  under  the  laws  of  Missouri, 
on  the  29th  day  of  May,  1900,  and  now  transacting  or 
conducting  business  in  the  State  of  Texas,  and  that  I am 
duly  authorized  to  represent  said  corporation  in  making 
this  affidavit,  and  I do  further  solemnly  swear  that  the 
said  Waters  Pierce  Oil  company,  known  and  styled  as 
aforesaid,  has  not  since  the  31st  day  of  January,  1900,  nor 
at  any  day  since  that  date,  and  is  not  now  a member  of 
or  party  to  anj-^  pool,  trust,  agreement,  combination,  con- 
federation or  understanding  with  any  other  corporation, 
partnership,  individual,  or  any  other  person  or  association 
or  persons,  to  regulate  or  fix  the  price  of  any  article  of 
manufacture,  mechanism,  merchandise,  commodity,  con- 
venience, repair,  any  product  of  mining  or  any  article 
or  thing  whatsoever.” 

In  passing,  permit  me  to  remark  that  under  a strict 
interpretation  of  that  anti-trust  law,  10,000  violations  are 
committed  every  business  day  of  the  week  in  Texas,  and 


that  this  number  will  increase  in  proportion  to  its  popu- 
lation and  prosperity,  but  it  is  not  permitted  that  Mr. 
Pierce  shall  be  judged  by  that  palpable  fact,  and  he  does 
not  ask  it. 

In  determining  whether  or  not  Mr.  Pierce  could 
truthfully  sign  that  affidavit  please  consider  the  follow- 
ing points: 

1.  He  was  the  sole  owner  of  the  stock  and  assets 
of  the  Waters  Pierce  Oil  company  at  the  time  he  made 
that  affidavit. 

2.  That  company  had  been  organized  in  Missouri 
only  two  days  before,  and  had  entered  into  no  combina- 
tion or  alliances  of  any  kind  such  as  were  inhibited  by 
the  anti-trust  law  of  1899  and  specified  in  the  affidavit. 

3.  The  old  Waters  Pierce  Oil  company  was  legal- 
ly dead,  and  the  affidavit  specifically  stated  that  it  ap- 
plied to  a company  organized  May  29,  1900. 

4.  The  company  specified  in  Mr.  Pierce’s  affidavit 
had  been  admitted  into  Texas  only  a few  minutes  before 
he  signed  the  affidavit,  and  if  Mr.  Pierce  had  “conspired’' 
it  must  have  been  in  the  presence  of  the  state  officials  of 
Texas. 

In  his  open  letter  of  Oct.  15  of  last  year  to  Governor 
Campbell,  Mr.  Pierce  declines  to  stand  on  the  quibble 
“that  the  Waters  Pierce  Oil  company  mentioned  in  the 
affidavit  was  an  infant  only  two  days  old.  I waive  that,” 
he  asserts,  “and  declare  that  I could  have  truthfully 
signed  it  at  any  time  thereafter,  and,  if  it  were  required 
by  law,  would  unhesitatingly  sign  it  today.” 

That  involves  legal  issues  which  I am  not  compe- 
tent to  discuss.  I ask  the  reader:  Have  I demolished 

the  familiar  “affidavit  lie?”  Will  it  be  repeated  so  glibly 
in  the  future?  I hope  not,  but  tliere  is  no  demand  for 
facts  in  certain  quarters. 


Chapter  XV. 

HOW  TEXAS  HAS  LOST  MONEY 


The  Texas  permit  to  the  present  Waters  Pierce  Oil 
company  was  granted  by  Secretary  of  State  Hardy  on 
May  31,  1900.  On  the  following  day  Mr.  Pierce  and  his 
attorneys  were  in  Waco,  where  they  made  an  ineffectual 
attempt  to  compromise  certain  cases  which  were  pend- 
ing in  the  courts  against  the  old  company.  On  account 
of  the  disagreement  between  the  law  firm  of  Henry  & 
Stribling  and  Cullen  F.  Thomas,  county  attorney  of  Mc- 
Lennan county,  over  the  divisions  of  fees,  no  terms  were 
agreed  on.  These  suits  were  later  dismissed  or  decided 
in  favor  of  Mr.  Pierce,  with  the  result  that  Texas  did  not 
get  a dollar,  and  that  the  State  treasury  was  depleted  by 
the  large  amount  expended  in  the  prosecution. 

Texas  received  the  news  that  a new  Waters  Pierce 
Oil  company  had  been  admitted  to  do  business  in  the 
State  with  calm  indifference,  but  certain  politicians  saw  a 
chance  to  brew  a row  for  their  personal  advantage.  They 
were  aided  by  some  of  the  papers.  Congressman  Bailey 
was  a candidate  for  the  United  States  senatorship,  and 
had  a commanding  lead.  The  attack  centered  on  him 
and  on  Attorney  General  Thomas  S.  Smith,  and  there  is 
no  doubt  that  the  slanders  circulated  against  that  brave 


and  ruggedly  honest  official  hastened  his  death.  Never  in 
the  history  of  American  politics  was  a man  accused  more 
unjustly  than  Tom  Smith  for  performing  his  plain  duty 
under  the  law.  The  legislature  of  his  State  speedily  ac- 
quitted him  of  any  wrongdoing,  but  the  wound  was  in  his 
heart,  and  he  died. 

THE  CAMPAIGN  OF  ABUSE. 

Not  until  the  Democratic  State  convention  met  in 
Waco,  in  the  summer  of  1900,  was  there  inaugurated  the 
existing  campaign  of  abuse  and  misrepresentation  against 
the  Waters  Pierce  Oil  company.  I have  spent  many 
months  in  a study  of  this  subject;  I have  talked  with  hun- 
dreds of  sincere  and  well  informed  men  in  every  section 
of  the  Lone  Star  State;  I think  I know  the  sober  senti- 
ment of  the  people  of  Texas,  and  I thoroughly  believe 
that  the  reckless  and  wicked  campaign  which  has  centered 
around  this  corporation  has  deplorably  lowered  the 
standard  of  political  morals;  that  it  has  engendered  eva- 
sion and  hypocrisy;  that  it  has  been  forced  to  the  front 
by  selfish  partisans  to  the  ignoring  of  economic  questions 
and  political  measures  which  are  of  real  importance,  and 


—39— 


which  should  be  discussed  and  settled  by  the  voters  of 
Texas. 

It  may  be  assumed  that  in  the  years  prior  to  1897 
the  original  Waters  Pierce  Oil  company  took  advantage 
of  its  commanding  supremacy,  and  that  its  agents,  with- 
out the  knowledge  of  its  officers,  committed  acts  which, 
in  a few  instances,  were  against  the  letter  and  intent  of 
the  laws  passed  by  Texas  for  the  regulation  of  the  af- 
fairs of  corporations.  There  is  no  doubt  that  the  com- 
pany should  have  been  punished  for  such  infractions  of 
the  law,  and  it  is  a matter  of  fact  that  Mr.  Pierce  was 
willing  and  even  eager  to  pay  some  penalty,  even  when 
it  was  obvious  that  he  could  escape  all  fines  by  legal  tech- 
nicalities. It  was  unfortunate  for  Texas  and  for  the 
Waters  Pierce  that  the  decision  of  the  appellate  courts 
left  no  alternative  save  a dissolution  of  the  old  company 
and  the  organization  of  a new  one. 

There  was  not  an  official  in  Austin  in  1900,  from 
Governor  Sayers  down,  who  did  not  realize  that  it  was 
imperative  that  the  business  organization  of  the  Waters 
Pierce  Oil  company  should  not  be  destroyed.  There  was 
not  an  intelligent  business  man  in  Texas  who  was  not 
aware  that  the  blotting  out  of  that  company  would  be 
an  absolute  calamity.  It  was  practically  the  sole  distrib- 
uting oil  agency  in  Texas.  It  was  transacting  not  less 
than  95  per  cent  of  tlie  oil  business  in  the  State,  and  was 
operating  from  more  than  300  stations. 

It  would  have  taken  years  to  have  duplicated  its 
plant,  and — mark  this  statement — a new  company,  no 
matter  who  its  stockholders,  would  have  been  compelled 
to  have  purchased  most  of  its  supplies  from  the  Standard 
Oil  company,  which  monopoly  would  have  exacted  as 
much  or  more  than  formerly,  and  there  is  little  doubt 
that  Texas  would  have  paid  more  for  its  oil.  This  sit- 
uation prevails  today.  The  Standard  Oil  company  will 
directly  or  indirectly  furnish  the  greater  portion  of  the 
oil,  no  matter  what  Texas  does  with  the  Waters  Pierce 
Oil  company.  Cunning  politicians  may  climb  into  office 
by  misrepresenting  the  Waters  Pierce,  but  the  price  of 
oil  is  not  determined  by  the  complexion  of  the  State 
legislature,  or  by  the  fees  paid  to  prosecuting  officials. 
You  can  not  hit  John  D.  Rockefeller  by  shooting  at  Henry 
Clay  Pierce,  and  it  is  distressing  to  see  such  a waste  of 
ammunition,  and  such  a mistake  in  aim. 

THE  WACO  CONVENTION  OF  1900. 

It  was  at  the  Democratic  State  convention  in  Waco 
that  the  Waters  Pierce  Oil  company  was  forced  into 
politics.  Certain  politicians  used  it  as  a club  to  ham- 
mer the  aspirations  of  Mr.  Bailey.  They  did  not  hesi- 
tate to  drag  in  the  name  of  Tom  Smith.  Then  and  there 
it  was  discovered  that  it  was  possible  to  arouse  passion 
and  prejudice  by  linking  the  names  “Standard  Oil,”  “Wa- 
ters Pierce”  and  “Joe  Bailey.”  Delegates  who  certainly 
knew  the  facts,  and  others  who  had  helped  make  this  his- 
tory, deliberately  falsified  the  record  in  their  convention 
speeches,  and  from  that  day  to  this  the  people  of  Texas 
have  been  deceived  and  bewildered  by  men  wnose  mo- 
tives have  been  utterly  selfish. 

It  is  beyond  my  comprehension  that  men  in  high  of- 
ficial position  and  of  fair  repute  have  dared  ignore  the 
plain  and  authenticated  records,  and  have  unblushingly 
faced  their  constituents  with  falsehoods  on  their  lips. 
The  success  of  their  vicious  campaign  has  been  based  on 
the  fact  of  the  intense  hatred  and  suspicion  of  the  public 
against  the  Standard  Oil  company.  In  the  old  colonial 
days  the  whisper  of  a witch  was  sufficient  to  set  the  fires 


blazing  on  Salem’s  hills;  in  recent  years  in  Texas  it  has 
been  equally  easy  to  damn  a man  or  a corporation  by  as- 
serting a Standard  Oil  connection.  The  plundered  pub- 
lic has  sought  not  proof  but  victims.  It  has  been  willing 
to  believe  anything  from  any  source.  Unable  to  reach 
out  and  grasp  Rockefeller  or  Rogers  by  the  neck,  it  has 
lent  a willing  ear  to  the  foulest  of  slanders,  and  a plea 
for  fairness  has  often  been  denounced  as  a confession  of 
guilt..  Happily  for  Texas,  this  era  is  drawing  to  a close. 

The  prairie  fire  of  prejudice  was  .lighted  in  the  Waco 
convention,  and  it  spread  to  many  sections  of  the  State. 
Various  papers  echoed  the  charges  made  against  .Attor- 
ney General  T.  S.  Smith,  and  the  enemies  of  Joseph  W. 
Bailey  invoked  against  him  the  festered  obloquy  and  pop- 
ular damnation  of  Standard  Oil.  It  mattered  nothing  that 
Tom  Smith  was  the  soul  of  honor;  it  mattered  nothing 
that  the  official  records  of  Texas  and  Missouri  disproved 
the  charges  circulated — demagogues  had  at  last  found  a 
method  of  warfare  to  their  liking,  and  they  plied  the 
torch  in  fields  dried  by  passion  and  ignorance.  They 
were  mistaken,  however,  in  their  estimate  of  Texas.  They 
went  down  to  defeat  in  the  first  encounter  with  the  sober 
judgment  of  the  representatives  of  the  people.  They 
have  won  some  skirmishes  since — petty  victories  wliich 
have  cost  Texas  most  dear— but  they  are  facing  a de- 
feat which  will  forever  put  a ban  on  their  methods. 

THE  FIRST  BAILEY  INVESTIGATION. 

In  January,  1901,  the  Texas  legislature  appointed  a 
committee  of  seven  to  investigate  charges  preferred 
against  the  State  officials  and  Congressman  Bailey,  “sur- 
rounding the  readmission  of  the  Waters  Pierce  Oil  com- 
pany and  the  alleged  connection  of  certain  officials  there- 
with,” 

The  resolution  was  introduced  by  D.  A.  McFall.  It 
specified,  among  other  things,  that  the  dissolution  of  the 
Waters  Pierce  and  its  reincorporation  “perpetrat- 
ed upon  the  State  of  Texas  a fraud  which  has 
brought  her  laws  and  courts  into  disrepute  both  at  home 
and  abroad,  and  shame  and  humiliation  upon  her  peo- 
ple. ’ It  also  charged  that  "the  perpetrating  of  said  al- 
leged fraud  had  the  passive  assistance  of  certain  State 
officials  and  the  active  assistance  of  Congressman  Joseph 
W.  Bailey,  who  is  now  a candidate  before  the  legislature 
for  the  high  office  of  United  States  senator.” 

Attorney  General  Smith  at  once  addressed  a letter 
to  the -legislature  in  which  he  earnestly  asked  “that  his 
official  acts,  as  well  as  his  every  connection  with  the 
Waters  Pierce  Oil  company  be  fully,  thoroughly  and  rig- 
idly investigated  as  though  he  had  been  particularly 
named  in  said  resolution,  and  be  youi  conclusion  what 
it  may,  he  prays  a specific  declaration  as  to  him,  to  the 
end  that  if  he  is  guilty  of  wrong,  the  people  of  Texas, 
to  whom  he  is  responsible,  and  whose  sovereignty  he 
recognizes,  shall  be  advised.” 

There  was  submitted  to  the  investigating  committee 
the  unimpeachable  evidence  which  proved  that  the  Wat- 
ers Pierce  Oil  company  was  granted  a permit  to  do  busi- 
ness in  Texas  by  legal  methods  specifically  provided  by 
the  laws  of  Missouri  and  Texas,  and  in  accord  with  the 
Constitution  of  the  United  States.  The  official  docu- 
ments, which  I have  previously  quoted,  were  shown  to 
the  committee — documents  which  the  average  citizen  of 
Texas  did'  not  know  had  an  existence  until  I presented 
them  in  these  papers.  It  was  absolutely  demonstrated 
by  them  that  Congressman  Bailey  had  no  part  in  secur- 
ing a permit  for  the  newly  organized  Waters  Pierce.  It 


is  true  that  .Mr.  Bailey  did  not  then  make  public  his 
personal  financial  transactions  with  Mr.  Pierce— whether 
or  not  he  should  have  done  so  is  purely  a matter  of  in- 
dividual opinion.  The  question  if  it  was  proper  that  Mr. 
Bailey  should  have  borrowed  a sum  of  money  from  Mr. 
Pierce  is  one  of  propriety,  and  it  has  nothing  more  to  do 
with  the  legality  of  the  admission  into  Texas  of  the_  Wa- 
ters Pierce  Oil  company  than  has  that  other  moot 
•question  of  whether  it  is  proper  for  Senator  Bailey  to 
wear  a dress  suit. 

If  Mr.  Bailey  had  gone  to  Tom  Smith  and  told  him 
all  that  was  brought  out  years  later  on  the  second  investi- 
gation, it  would  not  have  changed  in  the  slightest  degree 
the  force  and  effect  of  the  Missouri  and  Texas  laws  gov- 
erning the  admission  of  corporations.  This  seems  an 
obvious  statement  and  one  not  susceptible  of  contradic- 
tion, but  it  is  extremel}'  difficult  to  hammer  it  into  cer- 
tain critics.  As  I have  said  before,  their  fight  is  with 
the  law.  They  are  opposed  to  the  enforcement  of  the 
written  laws  on  Texas  statute  books,  and  their  quarrel  is 
not  with  Mr.  Pierce,  but  with  the  law  which  he  invoked, 
and  which  Attorney  General  Tom  Smith  and  Secretary 
of  State  Hardy  respected  and  obeyed. 

V1>PICA1T0>  OF  TOM  SMITH  A>D  CO-NGRESSMAA 
BAILET. 

The  committee  listened  patiently  to  such  testimony 
as  was  offered,  did  its  best  to  bring  before  it  those 
persons  who  had  circulated  vague  charges,  and  having 
performed  its  duty  to  the  best  of  its  ability,  returned  a 
report  the  essence  of  which  was  as  follows; 

"All  the  witnesses  and  all  the  documents  submitted 
completely  and  fully  exonerated  Hon.  Joseph  W.  Bailey 
and  our  State  officials  from  all  just  cause  of  censure,  and 
your  committee,  therefore,  recommend  the  adoption  of 
the  following  preamble  and  resolutions: 

“Whereas,  The  committee  of  the  house  of  represen- 
tatives appointed  to  investigate  the  charges  against  Hon. 
Joseph  W.  Bailey  and  certain  State  officials  in  connec- 
tion with  the  readmission  of  the  Waters  Pierce  Oil  com- 
pany into  this  State,  have  performed  their  duty;  and, 

“Whereas,  By  the  most  diligent  inquiry,  they  have 
not  been  able  to  find  a single  fact  or  circumstance  dis- 
creditable either  to  Hon.  J.  W.  Bailey  or  to  any  State 
official,  but  on  the  contrary,  all  of  the  evidence  before 
said  committee  completely  and  overwhelmingly  exoner- 
ates Hon.  J.  W.  Bailey  and  all  State  officials  from  all 
charges  of  misconduct;  therefore  be  it 

“Resolved  by  the  house  of  representatives.  That  we 
denounce  the  malicious  imputations  and  insinuations 
against  the  integrity  of  Hon.  J.  W.  Bailey  and  our  State 
officials,  as  the  most  cruel,  vindictive  and  unfounded  at- 
tack ever  made  upon  the  character  of  a faithful  public  ser- 
vant in  Texas.” 

This  bitter  rebuke  to  the  pioneers  of  the  campaign 
of  falsehood  and  villification  was  signed  by  six  of  the 
seven  members  of  the  committee,  and  passed  by  the  prac- 
tically unanimous  vote  of  the  legislature.  Mr.  Decker, 
the  minority  member,  thought  that  the  language  of  the 
resolution  tended  “to  curtail  the  right  of  free  speech  and 
condemn  honorable  men  of  Texas,  who  have  honestly 
believed  that  Mr.  Bailey  did  wrong  in  aiding  the  Waters 
Pierce  Oil  company  in  obtaining  a permit  to  do  business 
in  Texas,  and  that  Attorney  General  Smith  should  have 
advised  that  the  oil  company  go  to  the  courts  to  obtain 
its  relief.” 

Mr.  Decker  did  not  protest  against  the  finding  of  the 
committee,  but  was  sincerely  anxious  that  there  should 


be  conserved  "the  right  to  discuss  and  criticise  the  pub- 
lic acts  of  officials  and  those  seeking  high  and  honorable 
offices  at  the  hands  of  the  people,  so  long  as  such  criti- 
cism is  kept  within  the  bounds  of  reason  and  not  backed 
up'  bj-^  malice.” 

EFFECT  OF  THE  VIADICATION  OF  TOM  SMITH. 

The  Texas  legislature  of  1901  had  before  it  all  of 
the  essential  facts  now  known  concerning  the  granting 
of  a permit  to  the  new  W'aters  Pierce  Oil  company,  and 
its  vindication  of  Attorney  General  Smith  and  other  State 
officials  set  the  seal  of  legislative  approval  on  that  act. 
Any  body  of  intelligent  men  today,  with  the  same  evi- 
dence before  them,  would  return  the  same  verdict,  yet 
this  does  not  estop  the  Cranes,  Crawfords,  Cockes,  Sen- 
ters  and  others  from  repeating  their  parrot  cry  of  "the 
fraud  by  which  the  Waters  Pierce  Oil  company  entered 
Texas  in  1900.” 

The  action  of  the  legislature  had  a quieting  effect  on 
those  who  sought  to  take  political  advantage  of  the  com- 
plications of  the  Waters  Pierce.  The  anti-trust  law 
of  1889  was  in  full  force  and  effect.  It  was  the  most  rigid 
and  exacting  of  all  the  laws  against  corporations  ever 
passed  by  Texas.  It  prescribed  a maximum  fine  of  $5000 
a day  for  violation  of  its  restrictions,  and  provided  that 
suits  could  be  filed  by  the  attorney  general  of  the  State, 
or  by  any  one  of  the  county  attorneys  of  the  two  hundred 
and  forty  odd  counties. 

The  anti-trust  law  of  1889  offered  to  the  prosecuting 
officials  the  tempting  inducement  of  a fee  of  25  per  cent 
commission  on  all  penalties  assessed  against  a convict- 
ed corporation.  Here  was  a bait  of  $1250  a day  for  any 
county  attorney  who  could  collect  sufficient  evidence  to 
convict  the  new  Waters  Pierce  Oil  company  of  violations 
of  the  law  of  1.889.  Surely  there  was  every  incentive  to 
proceed  against  the  company  if  it  was  the  lawless  con- 
cern in  those  years  that  the  people  of  Texas  have  been 
asked  to  believe.  And  yet,  what  is  the  record? 

RECORD  OF  THE  “LAWLESS  TRUST.” 

From  May  31,  1900 — the  date  on  which  the  new  Wa- 
ters Pierce  Oil  company  was  admitted  to  do  business  in 
Texas — until  March  31,  1903 — the  date  on  which  the  law 
of  1899  was  replaced  by  a more  lenient  one — two  years 
and  ten  months,  with  a total  of  1033  days,  there  zvas  not 
a suit  hied  against  the  company  in  any  county  in  Texas.. 
.\ny  county  attorney  possessed  of  knowledge  that  the 
Waters  Pierce  was  violating  the  law  had  a chance  to  im- 
pose on  it  penalties  of  $5,165,000,  of  which  his  share 
would  have  been  $1,291,250.  He  was  not  required  to 
spend  a dollar  of  his  own  money  in  securing  testimony. 
He  could  have  farmed  the  job  out  to  private  law  firms  and 
detective  agencies,  could  have  offered  a division  of  profits 
to  star  witnesses  and  employes  of  the  Gruet  type,  who 
are  willing  to  prove  recreant  to  their  trusts,  and  could 
have  done  all  these  things  and  more  while  drawing  his 
regular  salary  from  his  county.  How  does  it  happen  that 
no  county  attorney  took  advantage  of  this  opportunity  to 
get  rich  and  at  the  same  time  cover  himself  with  glory? 

I am  forced  to  the  conclusion  either  that  the  county 
attorneys  of  Texas  in  the  years  from  1900  to  1903  were 
astoundingly  blind  to  their  chances,  or  to  the  conclu- 
sion that  they  could  find  not  pretext  for  a suit  against  the 
Waters  Pierce  Oil  company.  Every  man  of  sense  knows 
that  the  latter  was  the  case.  There  were  scores  of  coun- 
ty attorneys  who  would  have  jumped  at  a chance  to  mulct 
the  Waters  Pierce  or  any  other  rich  violator  of  the  law. 


—41  — 


That  was  the  sure  path  to  a fortune  and  high  political 
honors.  It  is  a fact  that  many  of  these  officials  scoured 
their  counties  for  testimony  which  would  warrant  them 
in  bringing  suit  against  the  oil  company. 

In  all  fairness  I submit  that  the  failure  of  any  county 
attorney  or  attorney  general  to  bring  suit  against  the 
Waters  Pierce  during  this  period  of  1033  days  is  con- 
clusive proof  that  Mr.  Pierce  was  keeping  his  word  to 
the  people  of  Texas  that  the  new  company  would  obey 
the  law.  I do  not  say  that  there  may  not  have  been 
trifling  violations  of  certain  technical  features  of  the  law 
on  the  part  of  certain  of  the  hundreds  of  agents  who  were 
representing  the  company  in  Texas.  It  would  be  remark- 
able if  every  agent  followed  his  written  instructions,  and 
if  some,  in  their  eagerness  to  make  a favorable  showing, 
had  not  overstepped  at  times  the  exact  limit  of  their  au- 
thority. The  law  does  not  contemplate  perfection  in 
agents.  It  recognizes  that  they  are  human  beings. 

WHY  SUITS  WERE  NOT  FILED. 

You  may  rest  assured  that  there  were  alert  and  cap- 


able county  attorneys  in  Texas  who  were  perfectly  fa- 
miliar with  the  methods  by  which  the  Waters  Pierce  Oil 
company  transacted  its  business.  You  may  be  sure  that 
these  officials  were  aware  that  no  violations  occurred 
which  would  warrant  the  bringing  of  a suit  for  penalties 
or  for  ouster.  You  may  be  sure  that  the  officers  of  the 
company  made  every  effort  to  abide  by  the  laws  of  Texas. 
They  were  not  fools.  They  had  been  expelled  once  on 
account  of  unauthorized  acts  of  one  of  their  agents.  They 
could  obey  every  valid  feature  of  the  anti-trust  law  of 
1889  and  still  maintain  their  trade  advantage  and  make 
fair  profits. 

It  was  good  business  policy  to  conform  to  the  law. 
It  was  common  sense  to  avoid  prosecutions.  Despite 
the  constant  surveillance  of  the  law  officials  of  Texas, 
undisturbed  by  the  ceaseless  scrutiny  of  politicians  eager 
to  take  advantage  of  a misstep,  the  Waters  Pierce  Oil 
company  performed  its  peaceful  mission  as  a retailer  of 
the  products  of  oil  from  the  time  of  the  admission  of  the 
new  company  until  and  for  years  after  the  anti-trust 
law  .of  1903  went  into  effect.  Not  until  September  22, 
1906,  was  a suit  filed  against  it. 


Chapter  XVI. 

THE  STRANGE  STORY  OF  GRUET 


In  1886  or  1887  a young  man  named  J.  P.  Gruet  went 
to  work  for  the  Standard  Oil  company.  He  had  marked 
ability  and  advanced  rapidly  in  the  avocation  he  had 
chosen.  Several  years  later  Henry  Clay  Pierce  asked 
the  manager  of  one  of  the  Standard  Oil  departments  to 
recommend  to  him  a competent  young  accountant.  J.  P. 
Gruet  received  the  recommendation  and  went  to  work  for 
the  original  Waters  Pierce  Oil  company  on  September 
15,  1890. 

It  was  natural  that  Mr.  Pierce  should  look  to  the 
Standard  for  capable  men.  In  fact,  he  could  draw  on  no 
better  source.  The  Standard  Oil  company  was  then,  as 
it  is  now,  the  foremost  business  training  school  in  the 
world.  It  had  attracted  to  itself  the  master  organizers 
of  the  United  States.  There  are  several  Standard  Oil 
companies.  The  careless  reader  and  lazy  thinker  knows 
only  one — a greedy  and  merciless  monopoly  which  illus- 
trates all  that  is  vicious  in  commercialism. 

I prefer  to  let  Miss  Ida  M.  Tarbell  describe  and  de- 
fine the  other  Standard  Oil  company,  which  she  graphic- 
ally does  in  her  recent  article  in  the  American  Maga- 
zine. I presumed  that  it  will  not  be  charged  that  Miss 
Tarbell  has  renounced  her  life  work,  and  that  she  is 
now  in  the  employ  of  the  oil  trust,  but  anyone  else  would 
likely  be  denounced  by  narrow  partisans  for  expressing 
the  following  obvious  truths: 

“It  is  folly  to  talk  about  ‘destroying’  the  Standard 
Oil  company,  ‘putting  it  out  of  business,’  ‘dissolving  it,’  ’’ 
boldly  asserts  the  woman  who  has  spent  a lifetime  in 
exposing  its  career.  “The  aim  of  this  prosecution  is  not 
to  create  chaos,  it  is  to  stop  abuses.  The  Standard  Oil 
company  is  an  integral  part  of  the  commerce  of  this  na- 
tion. It  is  the  most  magnificent  example  of  efficient  or- 
ganization on  a large  scale  that  has  ever  been  worked 


out  in  any  country.  It  is  a thing  of  which  we  ought  to 
be  able  to  be  proud.’’ 

The  “destroyers’’  and  “dissolvers”  are  very  noisy  if 
not  numerous  in  Texas,  and  I shall  let  them  settle  this 
matter  with  Miss  Tarbell, 

THE  INTERESTING  MR.  GRUET. 

Charles  Dickens  would  have  welcomed  J.  P.  Gruet 
into  his  family  of  characters.  All  the  world  hates  a 
traitor  and  an  informer — all  save  a novelist  in  search  of 
a villainous  type — and  since  I am  guilty  of  books  I am 
not  perhaps  properly  qualified  to  pass  judgment  on  Mr. 
Gruet.  The  plottings  of  Uriah  Heep  and  the  schemings 
of  all  the  other  characters  in  the  world  of  fiction  seems 
petty  and  commonplace  compared  with  the  results  at- 
tained by  this  real  person.  He  will  stand  out  in  history 
as  the  trusted  “hired  man”  who  shook  a commercial  and 
financial  edifice  of  billions  to  its  very  foundations;  as 
one,  whose  betrayal  of  a confidence  created  the  greatest 
sensation  in  a generation  inured  to  sensations. 

Mr.  Gruet  first  served  the  Waters  Pierce  Oil  com- 
pany in  the  capacity  of  auditor.  In  his  testimony  be- 
fore the  Bailey  investigating  committee  he  boastingly 
asserted  that  he  reorganized  the  business  of  the  Waters 
Pierce  after  he  joined  ^he  company.  In  his  charges 
against  the  Waters  Pierce  company.  Attorney  General 
Davidson  properly  classed  Gruet  as  one  of  the  directors 
representing  the  Standard  Oil  company  interest.  It  is  a 
matter  of  record  that  Gruet  later  declined  to  give  testi- 
mony against  the  Waters  Pierce  if  the  Standard  Oil  com- 
pany were  made  a party  to  the  suit.  These  facts  seem  to 
substantiate  the  theory  held  by  some  that  Gruet  ever 
played  or  intended  to  play  into  the  hands  of  his  first 
employer,  the  Standard  Oil  company,  or  that  he  was  used 


—42— 


as  a tool  by  some  conspiring  faction  in  that  great  com- 
bine. Only  a few  persons  know  the  truth,  and  only  hints 
of  it  have  been  divulged. 

This  we  know:  Gruet  held  successively  several  re- 
sponsible positions  in  the  original  Waters  Pierce  Oil 
company  and  its  existing  successor.  He  also  held  a con- 
fidential position  under  Mr.  Pierce,  and  for  years  re- 
tained the  complete  confidence  of  that  gentleman.  He 
had  access  to  all  the  papers  and  documents  of  the  com- 
pan>',  and  was  in  direct  charge  of  the  more  important 
ones.  In  addition  to  an  annual  salary  of  $7,500  paid  by 
the  company,  he  was  in  receipt  of  a special  annual  sti- 
pend of  $2,500  paid  personally  by  Mr.  Pierce. 

THi;  PECULIAR  ME.  CRUET. 

Years  prior  to  the  dissolution  of  the  original  Waters 
Oil  company  Mr.  Pierce  had  become  interested  in  many 
important  outside  investments  and  enterprises.  Since 
the  organization  of  the  present  company  he  has  con- 
cerned himself  only  with  its  larger  affairs,  leaving  to  the 
officials  and  directors  the  direct  contact  with  details. 
There  is  a popular  impression  that  Mr.  Pierce  has  spent 
most  of  hisrtime  in  recent  years  in -the  personal  super- 
vision of  a campaign  intended  to  extract  the  last  penny 
from  Texas,  and  his  spare  moments  in  resisting  extradi- 
tion. This  impression  is  erroneous. 

Certain  other  matters  have  made  demands  on  his 
time.  Not  many  years  ago  he  effected  the  reorganization 
of  the  Mexican  Central  railroad  and  he  has  recently 
brought  about  its  partnership  with  the  Mexican  govern- 
ment. In  this  vast  enterprise  he  has  invested  not  less 
than  $12,000,000.  He  is  a stockholder  and  director  in 
six  other  railroads  of  importance,  is  heavily  interested  in 
as  many  banks  and  is  a giant  figure  in  that  world  of  great 
affairs  not  inclusive  of  oil. 

Mr.  Gruet  had  no  call  from  Mr.  Pierce  for  extra  com- 
pensation, but  received  it  because  of  that  gentlemen’s 
friendly  interest.  Mr.  Pierce  spent  most  of  his  time  in 
New  York;  Mr.  Gruet  remained  most  of  the  time  in  St. 
Louis.  The  latter  had  one  unfortunate  habit,  which  I 
would  not  mention  did  it  not  have  a probable  bearing  on 
what  happened.  At  intervals  Mr.  Gruet  indulged  in  pe- 
riods of  intemperance — a fact  which  Mr.  Pierce  did  not 
discover  for  years.  ^Ir.  Gruet  had  a remarkably  accurate 
premonition  of  each  of  these  lapses  from  the  dismal  rou- 
tine of  the  oil  business,  and  for  some  time  before  he 
' severed  his  connection  with  the  Waters  Pierce  Oil  com- 
pany he  took  a most  peculiar  precaution. 

THE  CAUTIOUS  MR.  GRUET. 

It  was  his  practice — so  I am  told  by  those  who  should 
know — to  collect  from  the  files  and  vaults  of  the  com- 
pany— to  which  he  had  easy  access — a mass  of  letters, 
documents,  vouchers  and  confidential  correspondence  of 
a character  similar  to  that  which  later  fell  into  the  hands 
of  Attorney  General  Hadley  of  Missouri,  and  which 
formed  the  basis  of  a contract  by  which  Mr.  Gruet  hopes 
to  receive  one-third  of  $400,000  which  the  officials  of 
f Texas  hope  to  secure  in  fees  from  the  $1,600,000  fine 
which  they  hope  the  Waters  Pierce  Oil  company  will  be 
forced  to  pay.  It  was  the  habit  of  Mr.  Gruet  to  take 
this  collection  of  papers  from  the  office  of  the  company 
to  his  house,  or  to  some  other  location,  and  he  would 
then  absent  himself  from  his  duties  for  longer  or  shorter 
periods. 

On  his  return  from  these  unofficial  vacations  he 
would  bring  with  him  this  confidential  data.  It  is  not 
definitely  known  how  many  times  this  remarkable  pro- 


ceeding took  place,  but  from  1900  to  1904  Mr.  Gruet  was 
supreme  in  the  department  responsible  for  the  care  of 
these  papers,  and  no  one  in  the  secret  cared  or  dared 
to  acquaint  Mr.  Pierce  with  this  strange  procedure.  It  is 
likely  that  Sherlock  Holmes  would  easily  have  discov- 
ered the  motive  which  influenced  J.  P.  Gruet. 

In  1904  an  upheaval  in  the  official  affairs  of  the  Wa- 
ters Pierce  Oil  company  deposed  Gruet  from  the  direct- 
ory, his  place  being  taken  by  R.  P.  Tinsley,  who  directly 
represented  the  Standard  Oil  interest  in  the  company, 
and  who  took  advantage  of  the  serious  illness  of  Mr.  A. 
M.  Finlay,  who  was  then  president  of  the  company,  to 
make  himself  supreme  for  a time  in  the  affairs  of  the 
Waters  Pierce.  1 am  anticipating  the  sequence  of  my 
narrative,  *nd  shall  consider  the  Tinsley  interregnum  in 
detail  later,  but  introduce  him  now  for  the  purpose  of 
throwing  a side  light  on  J.  P.  Gruet. 

Tinsley  soon  became  acquainted  with  the  fact  of 
Gruet’s  unfortunate  habits,  and  shortly  tliereafter  Gruet 
was  requested  to  resign,  and  did  so.  Mr.  Pierce  learned 
the  details  of  the  usurpation  of  the  autocratic  Tinsley, 
brought  about  the  deposition  of  that  Standard  Oil  repre- 
sentative, and  resumed  control  of  the  policy  of  the  Wa- 
ters Pierce,  electing  his  son.  Clay  Arthur  Pierce,  presi- 
dent to  succeed  Mr.  A.  M.  Finlay,  who  became  vice  Pres- 
ident. Mr.  Pierce  at  this  time  heard  the  story  of  J.  P. 
Gruet’s  unfortunate  indiscretions,  listuied  to  the  pleas 
and  promises  of  that  person,  forgave  him  and  placed  him 
in  a responsible  position. 

Not  long  after  this  act  of  leniency,  Air.  Pierce  placed 
Gruet  in  charge  of  a company  which  the  former  had 
formed  for  the  purpose  of  conserving  certain  investments 
to  which  he  could  not  give  proper  time  and  attention. 
Gruet  professed  and  perhaps  felt  delight  over  this  pro- 
motion. 

IVHAT  WAS  GRUET’S  MOTIVE? 

One  day  Gruet  disappeared.  He  had  been  trans- 
ferred from  St.  Louis  to  New  York,  so  as  to  be  in  closer 
touch  with  the  man  who  employed  and  had  confidence 
in  him.  The  first  inkling  that  Mr.  Pierce  had  of  his 
treachery  was  the  receipt  of  a formal  letter  of  resigna- 
tion from  Gruet.  This  letter  offered  no  explanation  of 
any  kind.  Mr.  Pierce  attributed  it  to  the  whim  of  a man 
under  the  influence  of  liquor  and  probably  abandoned  all 
hope  of  his  reformation.  Gruet  returned  to  St.  Louis, 
soon  disappeared  from  there,  and  later  was  discovered 
in  another  city  and  was  taken  to  a sanitarium.  His  son, 
J.  P.  Gruet,  Jr.,  was  then  in  St.  Louis  and  in  the  employ 
of  the  Waters  Pierce  Oil  company.  He  also  tendered 
his  resignation,  but  Mr.  Pierce  wrote  him  to  the  effeef 
that  he  was  not  held  responsible  for  the  faults  of  his 
father,  asked  him  to  recall  his  resignation,  which  he  did, 
and  remained  with  the  company  until  the  announced  re- 
creancy of  the  elder  Gruet. 

About  this  time  J.  P.  Gruet  made  a claim  for  a 
large  amount  of  money  which  he  asserted  was  due  him 
from  Mr.  Pierce  on  some  vague  and  palpably  absurd  pre- 
text. Mr.  Pierce  had  not  yet  made  public  this  corre- 
spondence, but  it  is  reasonable  to  assume  that  it  was  of 
a purport  similar  to  tliat  by  which  Senator  Bailey  was 
later  threatened  in  an  attempt  to  extort  from  him  S‘25, ()()() 
for  the  evidence  which  Gruet  was  alleged  to  have  in  his 
possession. 

Certain  it  is  that  Mr.  Pierce  could  have  settled  with 
J.  P.  Gruet  for  a money  consideration,  and  certain  it  is 
that  Air.  Pierce  declined  to  pay  Gruet  a dollar  as  the 


—43— 


price  of  his  silence.  Those  who  have  been  educated  to 
believe  all  sorts  of  charges  against  Henry  Clay  Pierce 
must  give  him  credit  for  the  stand  he  took  at  that  time. 
He  was  well  aware  of  the  fact  that  Gruet  was  in  a position 
to  reveal  every  detail  of  the  affairs  of  the  Waters  Pierce 
Oil  company,  but  Mr.  Pierce  believed  then,  as  he  does 
now,  that  there  was  no  illegality  in  the  fact  that  Standard 
Oil  interests  actually  owned  a majority  of  the  stock  of 
the  Waters  Pierce  Oil  company,  provided  that  the  mi- 
nority interest  was  permitted  to  dictate  the  policy  of  the 
company. 

It  is  possible  that  Mr.  Pierce  was  and  is  in  technical 
error  in  taking  that  position.  It  is  certain,  however,  that 
capable  lawyers  were  confident  that  his  position  was  le- 
gally unassailable,  and  so  advised  him.  It  *is  idle  for 
me  to  undertake  to  argue  this  question.  It  is  purely  a 
matter  of  law,  and  the  whole  case  of  the  guilt  or  inno- 
cence of  the  Waters  Pierce  rests  on  that  point — a point 
novel  in  the  history  of  American  jurisprudence,  and  one 
which  is  yet  to  be  determined  by  our  highest  court. 

But  Mr.  Pierce  was  fully  aware  that  the  public  would 
care  little  or  nothing  about  the  niceties  of  the  law.  He 
was  thoroughly  alive  to  the  fact  that  he  and  his  com- 
pany would  come  in  for  severe  public  condemnation  the 
moment  the  fact  was  made  known  that  the  Standard  Oil 
company  had  managed  in  some  way  or  other  to  acquire 
the  same  proportion  of  stock  in  the  new  Waters  Pierce 
Oil  company  which  it  had  in  the  old.  He  was  aware  that 
it  would  be  impossible  to  impeach  or  refute  the  testi- 
mony on  this  point  which  Gruet  could  give.  Gruet  had 
grown  up  with  the  company,  had  held  positions  which 
made  him  more  conversant  with  the  actual  details  of  the 
Waters  Pierce  in  recent  years  than  was  Mr.  Pierce  him- 
self. The  latter  soon  became  aware  that  important  docu- 
ments were  missing,  and  realized  to  a certainty  that  they 
were  in  Gruet’s  possession. 

MU.  PIERCE  DEFIES  GRUET. 

Mr.  Pierce  has  ever  had  able  counsel.  Better  even 
than  Mr.  Pierce  they  knew  the  complications  which 
would  follow  the  disclosures  which  Gruet  threatened  to 
make  His  treachery  meant  abuse  for  Mr.  Pierce,  and 
tlie  breeding  of  passion  and  prejudice  by  den\agogues  who 
would  take  advantage  of  it.  It  meant  vast  money  loss, 
possible  extinction  as  a corporation — all  this  and  more 
was  in  prospect,  and  a petty  sum  of  money,  compared  to 
the  amount  imperiled,  would  have  closed  the  lips  of  Gruet 
— but  Mr.  Pierce  unhesitatingly  refused  to  pay  him  a dol- 
lar, and  invited  Gruet  or  his  agents  to  do  the  worst. 

No  one  who  saw  J.  P.  Gruet  on  the  stand  at  Austin 
during  the  Bailey  investigation  will  make  the  suggestion 
that  he  was  inspired  by  contrition  or  by  a stern  sense  of 
public  duty.  Even  those  who  hated  Senator  Bailey  most 
bitterly  for  partisan  reasons,  and  who  had  halted  at  the 
use  of  no  weapon  to  accomplish  his  defeat,  gazed  with 
contempt  on  J.  P.  Gruet,  and  instinctively  distrusted 
every  word  he  said.  He  had  made  the  deal  with  the  pros- 
ecuting officials  of'Texas  by  which  he  was  to  have  one- 
third  of  the  fees  from  all  fines  in  the  pending  suits 
against  the  Waters  Pierce  Oil  company,  and  his  appear- 
ance before  the  Bailey  investigating  committee  served  a 
double  purpose;  it  gave  him  a chance  for  revenge  against 
the  man  who  had  refused  to  be  blackmailed,  and  it  also 
allowed  Gruet  to  rehearse  his  story  under  favorable  cir- 
cumstances. 

He  began  with  an  air  of  careless  insolence  and  stud- 
ied bravado.  Under  cross-examination  the  sneer  left  his 


lips.  When  confronted  with  the  fact  that  certain  of  his 
stolen  documents  had  been  changed  to  suit  his  ends  by 
erasures,  and  that  others  were  downright  forgejies,  and 
by  the  proof  that  there  was  reason  to  suspect  him  of 
more  than  treachery  to  those  who  had  ever  been  fair 
and  generous  to  him,  J.  P.  Gruet  offered  the  most  pitiable 
spectacle  ever  presented  to  a Texas  audience.  It  was  his 
first  and  probably  his  last  appearance  as  a witness,  unless 
the  defense  drags  him  forward  at  some  future  time  and 
exhibits  his  venality  for  sentimental  effect  on  a jury. 

GRUET  THE  IIVFOEMER. 

Such  was  and  is  Gruet — Gruet  the  betrayer  of  the 
man  who  placed  unmerited  confidence  in  him — Gruet  the 
man  who  was  forgiven  for  his  “unfortunate  infirmities,” 
and  who  wronged  the  man  who  forgave  him — Gruet  who 
hawked  about  documents  stolen  from  the  vaults  of 
his  employer — Gruet  who  finally  made  a bargain  and  en- 
tered into  partnership  with  a prosecuting  official,  sworn 
to  enforce  law  with  justice,  and  sworn  to  do  his  exact 
duty  in  consideration  of  a salary  paid  by  the  voters  and 
taxpayers  of  the  State  of  Texas. 

Detectives  and  police  officers  sometimes  find  it  neces- 
sary to  use  a criminal  to  secure  the  ends  of  justice,  but 
I know  of  no  instance  in  which  such  minor  officials  have 
entered  into  a compact  with  a self-confessed  crook,  such 
compact  having  for  one  of  its  ends  the  placing  of  money 
in  their  own  pockets.  It  has  remained  for  Texas  to  create 
a situation  in  which  a high  official  of  that  State  has  cared 
and  dared  to  use  a Gruet  for  the  purpose  of  personal 
gain  through  the  operation  of  the  machinery  of  the  law 
— in  which  a contract  was  made  between  those  sworn  to 
defend  the  law  and  a miserable  creature  who  had  broken 
not  only  the  law  but  also  the  sacred  bonds  of  trust  and 
friendship. 

WHAT  DO  YOU  THINK  OF  THIS! 

It  is  not  yet  time  to  write  all  of  this  story.  Much 
of  it  we  do  not  yet  know,  and  I have  neither  space  nor 
patience  to  score  certain  officials  as  they  richly  deserve, 
but  cannot  refrain  from  glancing  at  one  picture  for  a 
moment. 

Early  in  1907  Texas  resounded  with  the  charges  pre- 
ferred against  Senator  Bailey.  Gruet  had  placed  the 
stolen  and  mutilated  documents  in  the  possession  of  the 
attorney  general’s  office.  The  legislature  was  in  session. 
On  January  16,  1907,  the  House  of  Representatives  called 
on  the  attorney  general  for  the  Gruet  documents,  and  in 
response  to  that  call.  Jewel  P.  Lightfoot,  assistant  to 
Attorney  General  Davidson,  proudly  entered  the  hall. 
The  documents  were  read,  and  the  following  occured,  as 
reported  by  the  Galveston-Dallas  News: 

Mr.  Davis,  of  Brazos — “I  would  like  to  ask  the  attor- 
ney general  what  it  cost  his  department — if  they  paid 
Mr.  Gruet  any  amount  of  money  to  surrender  these  doc- 
uments?” 

Mr.  Lightfoot — “Not  a cent;  not  a cent.”  (Applause.) 

Now,  at  that  very  moment  there  were  on  file  in  the 
attorney  general’s  department  vouchers  showing  expense 
payments  to  Gruet  amounting  to  $414.16.  That  was  not 
the  worst  of  it.  It  later  developed  that  the  attorney 
general’s  office  had  entered  into  a contract  with  J.  P. 
Gruet;  that  this  contract  was  made  months  before  Jewel 
P.  Lightfoot  was  applauded  for  his  declaration  that  Gruet 
had  not  been  paid  a cent;  and  that  the  State  of  Texas 
had  been  paying  the  expenses  of  this  informer,  to  the  end 
that  Lightfoot  and  others  should  share  in  the  division 


of  more  than  $400,000  in  possible  fees  and  commissions 
to  be  secured  through  Gruet’s  testimony. 

Lightfoot  made  this  contract  with  Gruet  on  August 
29,  1907,  and  I print  it  in  full  for  the  purpose  of  giving 
the  honest  people  of  Texas  a dim  insight  into  a transac- 
tion which  reveals  one  of  the  motives  back  of  the  persist- 
ent prosecution  of  the  Waters  Pierce  Oil  company — and 
I will  say,  in  passing,  that  the  future  will  prove  that 
this  is  not  an  isolated  scandal.  Here  is  the  compact 
entered  into  between  the  sovereign  State  of  Texas — 
through  one  of  her  high  and  salaried  officials — and  Gruet, 
who  plundered  the  vaults  of  his  employer: 

THE  GRUET  CONTRACT. 

“St.  Louis,  Mo.,  August  29,  1906. — This  witnesseth: 
That,  whereas,  Mr.  John  P.  Gruet,  secretary  of  the  Wa- 
ters Pierce  Oil  company,  is  in  possession  of  much  valu- 
able information  concerning  the  Waters  Pierce  Oil  com- 
pany and  the  Standard  Oil  company  and  their  business 
methods,  I have  this  day  employed  the  said  Gruet  to  as- 
sist the  attorney  general’s  department  of  Texas  in  de- 
veloping a case  against  the  said  \Vaters  Pierce  Oil  com- 
pany for  committing  a fraud  on  the  State  of  Texas  by 
juggling  of  stocks  of  the  W'aters  Pierce  Oil  company  at 
the  time  of  its  reorganization  in  1900,  and  for’  subsequent 
violations  of  the  anti-trust  laws  of  the  State  of  Texas. 

“It  is  understood  and  agreed  to  by  the  said  Gruet  that 
he  will  assist  in  the  preparations  of  depositions  to  be  pro- 
pounded to  witnesses  in  the  shape  of  interrogatories,  and 
take  necessary  steps  to  procure  testimony  of  witnesses 
for  the  purpose  of  the  State,  and  will  attend  the  trials 
of  the  said  cause  at  Austin  until  judgment  is  finally  ren- 
dered, and  will  testify  to  all  facts  within  his  knowledge 
concerning  said  companies  and  their  business  methods, 
and  will  also  attend  the  trial  of  H.  Clay  Pierce,  in  the 
event  a true  bill  is  returned  against  him. 

"In  consideration  whereof,  the  State  of  Texas  will  pay 
the  actual  necessary  expenses  of  said  Gruet  in  attending 
the  said  trials,  and  as  a further  compensation  fbr  time 
lost  and  valuable  assistance  as  above  detailed,  the  said 
Gruet  shall  receive  one-third  of  the  commissions  allowed 
by  law  to  prosecuting  officers  in  anti-trust  suits,  provided 
said  penalties  are  collected;  otherwise  he  shall  receive 
one-third  of  only  such  amount  as  may  be  collected,  and  in 
event  no  judgment  is  secured  or  penalties  collected,  then 
his  compensation  will  be  his  actual  expenses,  as  above 
set  out. 

“In  the  event  of  the  death  of  said  Gruet  before  final 
judgment  is  rendered,  his  interest  in  whatever  commis- 
sions collected  shall  be  paid  to  the  estate  of  the  said 
Gruet. 

J.  P.  LIGHTFOOT, 
Assistant  Attorney  General.” 

It  is  to  be  regretted,  first,  that,  Mr.  Lightfoot  deemed 
it  necessary  to  assure  the  legislature  that  Gruet  had  re- 
ceived nothing  from  the  attorney  general’s  department; 
second,  that  he  did  not  see  fit  to  embark  his  own  money 
in  that  Gruet  enterprise,  rather  than  make  Texas  bear 
the  financial  load;  and,  third,  that  he  ever  entered  into 
such  a disgraceful  compact.  But  there  it  is.  Read  it 
again  and  ponder  over  the  question  if  it  has  any  bear- 
ing on  the  campaign  of  falsehood  which  has  been  waged 
against  the  Waters  Pierce  Oil  company. 

MORE  LIGHT  ON  GRUET. 

Since  the  prosecution  depends  largely  on  the  pic- 
turesque Gruet  for  a verdict  against  the  Waters  Pierce 
Oil  company,  and  since  the  all-important  question  of 
whether  the  officials  will  pocket  that  $400,000  fee  hinges 
largely  on  Gruet’s  testimony,  I may  be  forgiven  for  a 
gingerly  use  of  the  muck-rake — and  no  other  tool  is  fitted 
for  this  purpose. 


Note,  please,  that  Gruet  entered  into  that  contract 
with  Assistant  Attorney  General  Lightfoot  on  August 
20,  1906.  Later  he  denied  that  he  signed  any  such  con- 
pact,*  and  still  later  he  admitted  that  he  did  sign  it — 
what  he  will  assert  in  the  future  is  a matter  open  to  con- 
jecture. If  Gruet  feels  a certain  sense  of  shame  over  such 
a contract,  how  about  the  other  parties  to  that  transac- 
tion? But  I will  not  discuss  that  point.  Bear  in  mind 
that  Gruet  signed  the  famous  contract  on  August  29,  1906. 

On  October  6,  1906,  about  six  weeks  after  Gruet  had 
entered  into  that  business  deal  with  the  prosecuting  of- 
ficials of  Texas,  he  made  a deposition  on  written  inter- 
rogatories, taken  by  the  attorney  general  of  Texas  and 
his  assistants,  at  Austin,  before  D.  J.  Pickle,  notary  pub- 
lic, in  the  case  of  the  State  of  Texas  vs.  the  Waters 
Pierce  Oil  company. 

The  following  cross-interrogatory,  propounded  by  Mr. 
Pierce’s  lawyers,  was  asked  of  Gruet: 

“State  if  you  have  any  agreement  or  understanding  of 
any  kind,  oral  or  written  express,  or  implied,  with  any  person, 
either  in  the  State  of  Texas,  the  State  of  Missouri  or  elsewhere, 
by  or  under  which  it  has  been  agreed,  or  is  understood'by  you,  or 
by  or  under  which  you  expect  to  receive  any  compensation,  or  by 
or  under  which  you  are  to  receive  or  understand  you 
are  to  receive,  any  part  of  any  penalties  which  may  be  re- 
covered in  this  suit  against  the  defendant,  or  to  share 
with  any  other  person  any  part  of  such  penalties,  if  re- 
ceived. If  so,  state  when  and  where  such  agreement  or 
understanding  was  entered  into  and  with  whom,  the 
terms  and  conditions  thereof,  and  whether  such  agree- 
ment or  understanding  is  in  the  form  of  a written  paper, 
signed  or  unsigned  by  you  or  any  one  else.  State  what 
is  the  amount  of  the  compensation  you  understand  you 
are  to  receive;  and,  if  a part  of  the  penalties,  what  part 
of  the  penalties  you  are  to  receive?” 

Keep  in  mind  that  Gruet  had  entered  into  his  com- 
pact with  Lightfoot  on  August  29,  and  that  Gruet  an- 
swered this  question  on  the  following  October  6.  Keep  in 
mind  that  prosecuting  officials  were  present  who  knew 
that  Gruet  had  signed  such  a contract,  and  then  study 
Gruet’s  answer  to  the  pointed  questions  asked  him,  and 
consider  that  he  was  under  oath  to  tell  the  truth,  the 
whole  truth  and  nothing  but  the  truth.  Here  is  Gruet’s 
reply: 

“I  am  to  receive  compensation  for  my  actual  travel- 
ing expenses.  I am  also  to  be  reimbursed  for  my  loss  of 
time  in  coming  to  Austin  whenever  requested.” 

Only  that  and  nothing  more.  No  official  of  the  at- 
torney general’s  office  deemed  it  necessary  to  refresh 
Gruet’s  memory,  and  months  passed  before  the  truth  was 
learned  from  another  witness.  I d.oubt  if  a scene  like 
it  ever  occurred  in  a court  of  justice,  and  Texas  will  one 
day  awake  to  the  infamy  attached  to  this  alliance. 

NATURE  OF  THE  GRUET  DISCLOSURES. 

Just  what  Gruet  told  Attorney  General  Hadley  of 
Missouri  is  not  known,  but  it  is  likely  that  he  answered 
all  questions  that  official  cared  to  ask.  Hadley  was  too 
politic  to  place  this  self-besmirched  person  on  the  witness 
stand  in  any  of  the  inquiries  which  have  been  held,  and 
has  handled  his  questionable  tool  at  arms’  length.  The 
documents  and  correspondence  — or  copies  of  the  same 
— used  by  Hadley  were  intended  to  prove  that  busi- 
ness relations  existed  between  the  Waters  Pierce  and  the 
Standard  Oil,  but  all  of  this  data  was  unimportant  com- 
pared with  the  statements  to  that  effect  frankly  made  by 
Henry  Clay  Pierce  when  he  took  the  stand  before  Com- 


niissioner  Robert  A.  Anthony  in  St.  Louis  on  September 
10,  1906. 

Gruet  revealed  nothing,  and  it  is  not  in  his  power 
to  disclose  any  essential  truth  not  already  made  public 
by  Mr.  Pierce.  In  the  spring  of  1905  the  Missouri  attor- 
ney general  brought  suit  against  the  Standard  Oil  com- 
pany, the  Republic  Oil  company,  and  the  Waters  Pierce 
Oil  company.  The  resultant  cases  are  still  before  the 
courts,  and  I shall  not  consider  them  in  detail,  but  the 
testimony  of  Mr.  Pierce  was  of  overshadowing  impor- 
tance. 


FRANK  ADMISSIONS  OF  HENRY  CLAY  PIERCE. 

Those  who  predicted  that  Mr.  Pierce  would  beat 
about  the  bush  and  take  technical  advantages  of  the  law 
to  evade  answering  questions  were  in  error.  He  not 
only  gave  direct  and  unequivocal  answers  to  all  fair 
(]ue‘stions  asked  him,  but  he  also  volunteered  information 
which  has  been  used  against  him  and  his  company. 

The  most  remarkable  thing  about  Mr.  Pierce’s  testi- 
mony is  this:  The  prosecuting  officials  of  Missouri  and 

Texas  assert  that  it  is  in  the  nature  of  a confession 
which  implicates  Mr.  Pierce  and  the  Waters  Pierce  Oil 
company  in  trust  relationship  with  the  Standard  Oil  com- 
pany. On  the  contrary,  the  attorneys  of  Mr.  Pierce  and 
of  his  company  assert  that  his  testimony  affirms  the  le- 
gal independence  of  the  Waters  Pierce  Oil  company,  and 
that  the  higher  courts  will  so  rule.  The  public  is  di- 


vided in  sentiment,  but  the  issues  raised  are  purely  le- 
gal, therefore  individual  opinions  have  no  weight. 

There  are  certain  features  in  Mr.  Pierce’s  testimony, 
however,  which  are  most  interesting  outside  of  their 
legal  aspects,  and  I shall  touch  on  certain  of  them  in 
the  two  concluding  chapters. 

It  is  worthy  of  note  that  both  sides  to  fhis  contro- 
versy have  thus  far  accepted  practically  without  reserva- 
tion the  truth  of  the  statements  made  by  Mr.  Pierce  be- 
fore Commissioner  Anthony,  as  brought  out  by  direct 
questions  and  the  rigid  cross-examination  by  Attorney 
General  Herbert  S.  Hadley.  It  is  also  worthy  of  note 
that  the  Texas  prosecution  relied  largely  on  the  use  of 
this  testimony  to  secure  a verdict  before  the  Travis  Coun- 
ty jury  which  brought  in  a decision  ousting  the  company 
from  Texas,  and  imposing  on  it  a fine  in  excess  of  $1,- 
600,000. 

It  is  no  reflection  on  the  intelligence  of  this  jury 
to  state  the  obvious  fact  that  the  great  question  at  issue 
was  entirely  beyond  the  scope  and  comprehension  of  a 
layman,  or  a body  of  laymen.  It  is  an  open  secret  that 
few  well-versed  lawyers  anticipate  that  this  verdict  will 
stand  the  test  of  the  United  States  Supreme  Court,  and 
it  is  the  consensus  of  expert  opinion  that  the  Waters 
Pierce  Oil  company  will  not  be  “destroyed”  or  its  prop- 
erty confiscated,  but  whether  these  things  happen  or  not, 
I take  it  that  fair-minded  men  are  unwilling  that  Mr. 
Pierce  shall  be  judged  by  those  who  insist  on  taking 
political  advantage  of  complications  which  have  been 
forced  on  him. 


Chapter  XVIL 

MR.  PIERCE  AS  A WITNESS 


Preceding  chapters  have  contained  many  of  the  facts 
brought  out  in  the  examination  of  Henry  Clay  Pierce 
Iiefore  Commissioner  Anthony  in  St.  Louis,  beginning  on 
September  10,  1906,  and  I propose  now  to  supply  the 
more  important  missing  links  as  furnished  by  his  testi- 
mony, paying  especial  attention  to  his  narration  of  his 
relations  to  the  Standard  Oil  officials. 

I have  indicated  by  conclusive  facts  and  in  connec- 
ed  detatil  that  whatever  of  alliance  existed  between  the 
Waters  Pierce  Oil  company — old  and  new — was  not  of 
Mr.  Pierce’s  seeking,  and  that  his  constant  ambition  has 
been  the  attainment  of  absolute  independence.  He  as- 
serts that  he  has  maintained  for  his  company  its  tech- 
nical or  legal  independence — a claim  which  the  courts 
have  yet  to  pass  on,  and  one  on  which  the  fate  of  that 
corporation  largely  depends. 

Possibly  Mr.  Pierce  should  have  taken  the  public 
completely  into  his  confidence  years  before  he  took  the 
stand  in  St.  Louis.  Possibly  he  should  have  disclosed 
the  details  of  his  various  negotiations  and  conflicts  with 
the  Standard  Oil  officials  and  perhaps  he  should  have 
outlined  the  exact  terms  demanded  of  the  oil  trust  and 
granted  by  it.  Such  a policy  would  have  astounded  the 
business  world,  but  it  would  have  shielded  Mr.  Pierce 
against  demagogues  and  would  have  destroyed  at  its 
inception  a new  but  flourishing  industry — the  quest  for 
fees  and  commissions  by  trust-hunting  prosecutors. 


Certain  critics  ask  why  it  was  that  Mr.  Pierce  did 
not  denounce  and  expose  the  Standard  Oil  company  and 
its  officials  when  on  the  witness  stand.  I do  not  know. 
Possibly  it  was  because  able  lawyers  assured  him  that  , 
there  was  no  law  estopping  the  Standard  or  its  members  j 
from  investing  in  the  stock  of  a retail  distributing  t 

agency.  Again  he  may  have  felt  a certain  hesitancy  in  t 

excoriating  interests  which  held  a majority  of  the  stock  , 
in  the  company  which  he  had  founded. 

Those  who  insist  that  Mr.  Pierce  shall  launch  thun- 
derbolts against  the  oil  trust  should  reflect  that  condi- 
tions are  such  that  the  Waters  Pierce  must  for  years 
remain  the  customer  of  the  Standard  Oil  company,  no 
matter  who  owns  the  stock  of  the  former.  The  Craw- 
fords, Cranes,  Cockes,  Senters  and  others  have  scaled 
the  calm  heights  of  altruism,  and  are  above  such  vulgar 
problems  as  the  oil  supply,  but  the  unfortunate  and  prac- 
tical Mr.  Pierce  still  gropes  in  the  valley  and  must  ob- 
tain oil  and  its  products  from  the  sordid  monopoly  which 
is  fostered  by  national  laws  not  of  his  making. 

MR.  PIERCE  AND  THE  STANDARD  OIL  COMPANY. 

When  asked  to  state  the  relations  “between  the 
Standard  Oil  company  and  the  present  Waters  Pierce  Oil 
company,”  Mr.  Pierce  thus  testified  under  oath: 

“When  the  license  of  the  first  Waters  Pierce  Oil 
company  to  do  business  in  Texas  was  revoked,  and  I 


sought  to  settle  with  the  State,  so  that  we  could  con- 
tinue our  business  there,  I was  told  very  frankly  by  a 
prominent  citizen  of  Texas,"  referring  undoubtedly  to  the 
then  Congressman  Bailey,  “that  the  people  of  that  State 
would  not  tolerate  the  methods  of  the  Standard  Oil  com- 
pany, and  that  no  corporation  controlled  by  that  com- 
pany would  be  permitted  to  carry  on  business  in  Texas. 
I explained  this  situation  fully  to  the  executive  commit- 
tee of  the  Standard  Oil  company,  and  they  agreed  that  I 
should  organize  a new  company;  the  stock  of  which  I 
should  hold,  and  that  I should  manage  and  control  the 
company  absolutely  free  from  any  dictation  or  direction 
of  the  Standard  Oil  company.” 

It  will  be  observed  that  Mr.  Pierce  does  not  say 
that  it  was  agreed  that  he  should  own  all  of  this  stock, 
but  that  he  should  “hold”  it.  He  later  stated  his  legal 
attitude  in  this  matter  in  the  following  terms,  when' 
cross-examined  by  Attorney  General  Hadley  of  Mis- 
souri; 

“It  is  well  known  that  people  in  whose  name  stock 
appears,  whether  they  own  it  or  not,  do  legally  own  and 
control  and  vote  the  stock  so  long  as  it  stands  in  their 
name,  and  the  mere  fact  that  they  have  parted  with  the 
certificate  does  not  take  from  them  the  power  to  vote 
and  control  the  stock.” 

The  question  of  the  legal  independence  of  the  Wa- 
ters Pierce  Oil  company  rests  to  a considerable  extent 
on  the  tenability  of  the  proposition  above  stated  by  Mr. 
Pierce,  who  thus  continued  his  testimony: 

I>TERFEKE>TE  OF  THE  STANDARD  OIL  COMPANY. 

“In  order  that  the  company  should  conduct  its  busi- 
ness in  strict  accord  with  the  laws  of  every  State  in 
which  it  was  operating,  I placed  the  attorney  of  our 
company  on  the  executive  committee,  with  instructions  to 
examine  all  reports  and  transactions,  to  the  end  that  no 
law  should  be  violated.  I earnestly  desired  the  company 
to  respect  and  obey  the  laws,  and  I felt  under  special  ob- 
ligations to  comply  strictly  with  the  laws  of  Texas. 

“Up  to  the  spring  of  1904  the  Standard  Oil  company 
made  no  attempt  to  interfere  in  any  way  with  my  man- 
agement and  control  of  the  Waters  Pierce  Oil  company, 
but  at  that  time  they  transferred  the  stock  which  stood 
in  my  name  to  M.  M.  Van  Buren,  and  began  in  other 
ways  to  assume  a control  over  the  affairs  and  operations 
of  the  company.  I protested  against  this  conduct  as  a 
violation  of  their  cbntract  with  me,  and  as  contrary  to 
the  representations  I had  made  to  the  people  of  Texas. 
After  frequent  interviews  and  discussions  on  this  point, 
the  management  and  control  of  the  company  were  again 
committed  to  my  direction,  and  my  son.  Clay  Arthur 
Pierce,  is  now  president  of  the  company,  and  conducting 
it  as  an  independent  business.” 

The  testimony  developed  the  fact  that  on  the  organ- 
ization of  the  present  company,  on  May  29,  1900,  that 
Mr.  Pierce  was  the  absolute  owner  of  all  of  the  stock 
of  the  company.  On  September  4,  a little  more  than 
three  months  later,  Mr.  Pierce  endorsed  2748  shares  of 
stock  in  blank,  which  shares  were  delivered  to  Mr.  Garth, 
cashier  of  the  Mechanics’  National  bank  of  New  York. 
The  following  colloquy  ensued  between  Attorney  Gen- 
eral Hadley  and  Mr.  Pierce: 

Mr.  Hadley — Why  did  you  transfer  that  stock? 

Mr.  Pierce— I transferred  that  stock  because  it  was 
understood  that  I would  do  so. 

Mr.  Hadley — At  the  time  of  the  organization  of  the 
new  company? 


Mr.  Pierce — Not  verbally,  or  by  any  understa  nding, 
but  tacitly  so  understood. 

Mr.  Hadley — With  whom? 

Mr.  Pierce — I think  I shall  have  to  refer  that  to  my 
attorney,  Mr.  J.  D.  Johnson. 

Mr.  Hadley — Your  testimony  is  now  that  within  a 
few  months  after  the  organization  of  the  new  company 
j'ou  parted  with  the  controlling  interest  to  some  party 
whose  identity  was  not  disclosed  to  you  and  whose  iden- 
tity is  not  disclosed  now? 

Air.  Pierce — Practically  that  is  correct. 

Air.  Hadley — When  did  you  become  aware  of  the 
identity  of  that  mysterious  person? 

Air.  Pierce — In  June,  1904,  I received  a telegram 
from  my  son  stating  that  the  stock  had  been  presented  to 
the  secretary  and  transferred  from  my  name  to  the  name 
of  AI.  AI.  Van  Buren. 

Air.  Hadley — Did  you  know  who  M.  M.  Van  Buren 
was? 

Air.  Pierce — I had  never  heard  of  him. 

Later  in  the  proceedings  the  following  testimony 
was  given: 

Air.  Hadley — When  was  the  conference  with  the 
executive  committee  of  the  Standard  Oil  company  at 
which  the  executive  committee  agreed  that  a new  com- 
pany should  be  organized  of  which  you  should  own  all 
the  stock? 

Air.  Pierce — I am  not  able  to  state  the  exact  time, 
but  these  conferences  were  held  very  frequently  during  the 
winter  and  spring  of  1900. 

Air.  Hadley — And  prior  to  the  organization  of  the 
new  company? 

Air.  Pierce — Yes. 

Mr.  Hadley — .And  do  you  wish  now  to  be  understood 
as  saying  that  all  the  understanding  that  you  had  at  that 
time  with  the  executive  committee  of  the  Standard  Oil 
company  in  reference  to  the  stock  of  the  new  company, 
was  that  it  should  be  held  in  your  name? 

Air.  Pierce — My  present  recollection  is  that  that  was 
the  case;  that  I had  no  personal  understanding  with  any 
of  the  members  of  the  executive  committee  prior  to  the 
organization  of  the  Waters  Pierce  Oil  company  as  to 
what  disposition  was  to  be  made  of  the  stock  which  was 
to  be  issued  to  me,  and  for  which  I was  personally  to 
pay. 

A STRANGE  BUSINESS  TRANSACTION. 

For  reasons  which  only  Air.  Pierce  can  explain — and 
which  doubtless  will  yet  be  made  public — he  later  trans- 
ferred in  blank  a majority  of  the  stock  of  the  company, 
with  the  explicit  understanding  that  he  was  to  retain 
voting  power  on  all  of  the  stock,  this  insuring  his  abso- 
lute control  so  long  as  this  compact  was  kept.  Air. 
Pierce’s  testimony  indicates  that  he  took  no  part  in  these 
negotiations. 

“I  was  told  by  my  attorney,”  he  stated  to  .Attorney 
General  Hadley,  “that  he  had  made  such  an  arrangement 
with  the  general  counsel  of  the  Standard  Oil  company. 

I know  nothing  of  the  arguments  used  by  the  dis- 
tinguished general  counsel  of  the  Standard  in  his  con- 
ference with  Air.  J.  D.  Johnson,  who  represented  Air. 
Pierce,  but  assume  that  they  were  forceful  and  know 
that  they  were  effective.  Of  course.  Air.  Pierce  could 
have  rejected  them  and  have  defied  the  oil  trust.  He 
could  then  have  presented  his  4000  shares  of  stock  to 
the  first  man  he  met  on  the  street,  and  would  have  lost 
little  by  such  generosity.  He  chose  the  more  prosaic  al- 
ternative of  accepting  the  best  bargain  which  could  be 


—47— 


made  with  an  invincible  antagonist,  and  that  bargain  in- 
cluded a pledge  of  independence  for  the  Waters  Pierce 
Oil  company  which  was  not  to  be  disputed. 

I believe  I have  stated  the  nature  of  this  transaction 
with  fairness  to  all  concerned  in  it.  It  does  not  make 
a hero  of  Mr.  Pierce,  neither  does  it  picture  the  Standard 
as  the  heavy  villain.  The  transaction  was  merely  busi- 
ness; a not  uncommon  specimen  of  the  devices  on  which 
the  whole  structure  of  our  commercial  edifice  is  based. 

THE  STANDARD  VIOLATES  ITS  AGREEMENT. 

From  1901  until  some  time  in  1905,  Mr.  H.  C.  Pierce 
suffered  from  ill-health.  His  condition  was  very  serious 
at  the  period  when  a crisis  was  precipitated  in  the  affairs 
of  the  company.  J.  P.  Gruet,  a director  and  secretary  of 
the  company,  became — to  quote  from  Mr.  Pierce’s  testi- 
mony— “because  of  unfortunate  infirmities  disqualified 
longer  to  hold  the  position.”  Mr.  Pierce  did  not  know 
the  nature  of  Gruet’s  “infirmities,”  neither  did  he  know 
that  he  was  plotting  treachery  and  blackmail.  Gruet  was 
a Standard  Oil  representative  on  the  board,  and  it  was 
conceded  their  right  to  fill  his  place,  subject  to  the  ap- 
proval of  Mr.  Pierce. 

Mr.  W.  H.  Tilford  of  the  Standard,  suggested  Mr. 
R.  P.  Tinsley,  and  Mr.  Pierce  sent  proxies  for  the  total 
capital  stock  of  the  company  from  New  York  to  St. 
Louis,  with  instructions  to  elect  Tinsley  in  place  of 
Gruet.  This  was  on  April  20,  1904,  up  to  which  time  no 
attempt  had  been  made  to  abrogate  the  agreement  made 
with  Mr.  Pierce  by  the  Standard  Oil  interests.  In  all 
elections  he  voted  all  the  stock,  and  the  company  was 
under  his  control,  or  the  control  of  his  direct  representa- 
tives. 

Mr.  Tinsley  had  long  been  in  the  employ  of  the  Stan- 
dard. He  did  not  come  to  St.  Louis  immediately  after 
his  election,  but  assumed  his  duties  at  about  the  same 
time  that  certain  of  the  Standard  Oil  officials  ordered  the 
2748  shares,  which  Mr.  Pierce  had  indorsed  in  blank, 
transferred  on  the  books  of  the  Waters  Pierce  Oil  com- 
pany from  Mr.  Pierce  to  M.  M.  Van  Buren,  son-in-law  of 
John  D.  Archbold,  a conspicuous  Standard  Oil  magnate. 
This  was  their  legal  right,  but  it  violated  the  pledge 
made  to  Mr.  Pierce,  whose  physical  condition  at  that 
time  was  such  that  he  was  unable  to  transact  business, 
much  less  successfully  to  combat  a cabal  which  had  been 
formed  at  26  Broadway. 

It  was  understood  that  Mr.  Tinsley  should  fill  the  po- 
sition of  auditor  or  comptroller.  He  was  elected  to  the 
vice  presidency,  but  Mr.  Pierce  had  a distinct  agreement 
with  Mr.  W.  H.  Tilford,  representing  the  interests  of 
the  Standard,  that  under  no  circumstances  was  Tinsley  to 
interfere  with  the  management  of  the  company.  Owing 
to  Mr.  Pierce’s  ill  health,  Mr.  Andrew  M.  Finley  had 
been  elected  president.  He  lacked  the  force  and  aggres- 
sive characteristics  of  his  predecessor,  and  was  unable  to 
assert  his  authority  against  the  new  Vice  President  Tins- 
ley, who  began  by  refusing  to  fill  the  position  of  comp- 
troller which  had  been  assigned  to  him,  and  who  ended 
by  driving  Mr.  Finley  to  nervous  prostration  and  a trip 
abroad  to  recover  his  shattered  health. 

TINSLEY  IN  FULL  CONTROL. 

Whether  or  not  Tinsley  proceeded  on  the  assumption 
that  he  was  authorized  to  represent  the  majority  of  the 
stock,  then  in  the  name  of  M.  M.  Van  Buren,  the  testi- 
mony does  not  disclose,  but  certain  it  is  that  he  grasped 
the  reins  of  power  and  ruled  with  a high  hand.  In  the 


absence  of  President  Finley,  and  during  the  serious  ill- 
ness of  Henry  Clay  Pierce,  no  efficient  opposition  could 
be  directed  against  him,  and  from  the  autumn  of  1904 
until  May  or  June,  1905,  the  influence  of  the  Standard 
Oil  company  in  the  affairs  of  the  Waters  Pierce  was 
dominant. 

Mr.  Pierce  thus  testified  concerning  the  “pernicious 
activity”  of  Vice  President  R.  P.  Tinsley: 

“He  took  away  from  General  Manager  Ackert  the 
management  of  the  Mexican  division  and  assumed  entire 
charge  of  it  himself.  He  sent  to  Mexico  as  manager,  un- 
der the  local  general  manager  of  Mexico,  a Standard  Oil 
company  employe  from  Cleveland,  Ohio,  who  was  entire- 
ly unfamiliar  with  Mexico,  its  customs,  people,  language, 
or  the  business  of  the  company  in  Mexico.  The  effect  of 
that  was  to  cause  the  very  effective  manager  of  the  com- 
pany in  Mexico  to  resign  his  position.  Mr.  Tinsley  pro- 
ceeded at  different  dates  to  remove  the  old  and  impor- 
tant employes  of  the  company,  heads  of  departments,  and 
to  substitute  in  their  places  inefficient,  incompetent  and 
inexperienced  men.  The  number  of  changes  in  the  man- 
agement of  the  company  equaled  200  or  300  in  the  ag- 
gregate, and  in  many  cases  those  substituted  were  Stan- 
dard Oil  company  employes. 

“When  this  information  came  to  my  knowledge  suf- 
ficiently to  enable  me  to  take  action,  I protested  to  the  of- 
ficials of  the  Standard  Oil  company  in  New  York  against 
the  unwarranted  action  of  Mr.  Tinsley  in  violating  the 
agreement  entered  into  between  the  Standard  Oil  com- 
pany and  myself  at  the  time  of  the  organization  of  the 
first  Waters  Pierce  Oil  company,  in  1878,  and  the  implied 
continuation  of  that  agreem'ent  at  the  time  the  present 
Waters  Pierce  Oil  company  was  organized.” 

The  result  finally  of  these  vigorous  protests  was 
that  Mr.  Tinsley  was  compelled  to  resign,  which  he  did 
on  June  22,  1905,  though  he  saw  the  coming  end  of  his 
usurpation  a month  or  so  sooner,  and  abandoned  St. 
Louis  and  returned  to  New  York,  late  in  April,  1905, 
where  he  again  entered  the  employ  of  the  Standard  Oil 
company. 

There  is  no  question  but  that  during  the  Tinsley  in- 
terregnum the  Waters  Pierce  Oil  company  was  con- 
trolled by  Standard  Oil  interests,  and  there  was  nothing 
theoretical  about  such  control.  There  is  also  no  doubt 
that  this  was  a conspiracy  which  had  a temporary  suc- 
cess because  of  the  serious  illness  of  Mr.  Pierce,  and  the 
lesser  force  and  aggressiveness  of  President  A.  M.  Fin- 
ley. The  plot  melted  into  thin  air  with  Mr.  Pierce’s  re- 
covery. He  created  for  himself  the  supreme  position  of 
chairman  of  the  board  of  directors,  and  elected  his  son, 
Clay  Arthur  Pierce,  to  the  presidency,  offices  which  both 
have  held  since  June  22,  1905. 

EFFECT  OF  GARBLED  PRESS  REPORTS. 

The  newspaper  reports  sent  broadcast  relative  to  the 
testimony  given  by  Mr.  Pierce  did  him  a grave  injustice, 
but  one  probably  not  intentional  on  the  part  of  the  writ- 
ers. Garbled  extracts  were  given  and  characterized  as 
a “confession.”  No  fair-minded  man  can  read  the  com- 
plete official  transcript  of  Mr.  Pierce’s  testimony  without 
coming  to  the  conclusion  that  he  believed  there  was  legal 
and  moral  justification  for  every  step  taken,  and  that  he 
contended  with  all  his  power  to  hold  his  company  strict- 
ly to  the  letter  and  spirit  of  the  law,  as  it  was  explained 
to  him  by  capable  counsel. 

It  was  an  easy  matter,  however,  for  the  politicians 
to  distort  and  misrepresent  the  frank  statements  made 


by  Mr.  Pierce  in  his  examination.  For  motives  purely 
political,  there  then  began  a campaign  of  vilification  and 
downright  falsehood  which  was  disgraceful.  It  was  not 
aimed  at  Mr.  Pierce  or  the  Waters  Pierce  Oil  company, 
but  over  their  shoulders  at  Senator  Bailey.  I doubt  if 
there  is  a prominent  politician  or  a public  character  in 
Texas,  active  in  calling  down  the  wrath  of  the  people  on 
Henry  Clay  Pierce  or  his  company,  who  sincerely  believes 
that  the  general  welfare  will  be  conserved  by  the  penaliz- 


ing of  Mr.  Pierce  or  by  the  confiscation  or  annihilation 
of  the  property  of  the  corporation  with  which  he  has 
been  identified  for  a lifetime.  There  is  not  an  intelligent 
man  in  Texas  who  does  not  now  understand  that  a clique 
of  politicians  has  bayed  at  the  Waters  Pierce  and  smirched 
Senator  Bailey,  not  because  of  their  transgressions,  but 
because  of  the  desire  of  these  politicians  to  ride  into  of- 
fice and  perquisites  on  a wave  of  public  passion  and  preju- 
dice. 


Chapter  XVIII. 

STR.\XCxE  IMMUNITY  OF  A “LAWLESS  TRUST  ’ 


Let  me  again  repeat  that  from  1878  until  1906,  a pe- 
riod of  twenty-eight  long  years,  only  one  suit  was  suc- 
cessfully prosecuted  by  Texas  officials  against  the  Waters 
Pierce  Oil  company,  and  that  was  decided  against  the 
company  on  account  of  slight  and  technical  violations 
which  did  not  implicate  it  as  a trust.  That  is  the  record 
of  a great  concern  operating  for  a generation  in  the  enor- 
mous territory  of  Texas. 

That  is  the  undisputable  record  of  a vast  trading  com- 
panjq  operating  through  hundreds  of  agents,  employing 
thousands  of  men,  distributing  products  worth  hundreds 
upon  hundreds  of  millions  of  dollars- — a single  conviction 
of  wrong-doing  because  an  inexperienced  agent  disre- 
garded his  written  instructions — and  yet  the  people  of 
Texas  have  been  asked  to  believe  that  the  Waters  Pierce 
has  been  “lawless,"  that  it  has  “defied  the  law”  and  that  it 
“has  scoffed  at  all  legal  restraint.” 

The  present  Waters  Pierce  Oil  company  has  been  in 
the  limelight  every  day  since  it  was  admitted  to  do  busi- 
ness in  Texas  on  May  31,  1900.  There  was  every  incen- 
tive to  attack  it.  The  anti-trust  law  of  1899  prescribed 
penalties  of  $5000  a day,  each  day  to  constitute  a sepa- 
rate violation,  and  allowed  county  attorneys  commis- 
sion of  25  per  cent,  or  a reward  of  $1250  a day.  There 
are  243  counties  in  Texas,  and  a general  and  successful 
legal  crusade  against  the  Waters  Pierce  Oil  company 
would  have  subjected  it  to  daily  fines  of  $1,215,000,  an- 
nual fines  of  $448,475,000,  which  result  would  have  netted 
each  of  the  243  county  attorneys  the  tidy  fee  of  $456,- 
250. 

Surely  there  was  no  reason  why  the  law  officers 
should  have  hesitated  to  bring  suits  against  the  Waters 
Pierce,  assuming  that  they  could  produce  evidence  against 
it. 

WHY  WERE  IfO  SUITS  BROUGHT? 

Political  reasons  also  tended  to  incite  prosecution 
and  persecution  of  the  Waters  Pierce.  Hatred  and  jeal- 
ousy of  Senator  Bailey  urged  certain  politicians  to  seek 
any  pretext  to  attack  this  corporation.  There  was  also 
anger,  or  pretended  anger,  over  its  admission  into  Texas, 
but  despite  these  factors  and  many  others,  no  suit  was 
filed  in  any  county  in  Texas  from  the  day  of  the  grant- 
ing of  a permit  to  the  present  Waters  Pierce  Oil  com- 
pany on  May  31,  1900,  during  the  remaining  period  of 
two  years  and  ten  months  in  which  the  sweeping  anti- 
trust law  of  1899  was  on  the  statute  books. 


My  explanation  of  that  fact  is  that  the  company 
strictly  obeyed  the  law,  and  that  the  prosecuting  officials 
knew  that  no  suit  would  hold  against  it. 

If  my  critics  have  any  other  explanation  to  account 
for  the  immunity  of  the  Waters  Pierce  while  operating 
under  this  most  drastic  of  all  anti-trust  laws,  now  is  their 
time  to  state  it  to  the  people  of  Texas.  One  petty  vio- 
lation in  any  county  by  any  agent  of  the  company  would 
have  been  sufficient.  Why  were  suits  not  brought? 

The  Supreme  Court  of  the  United  States  rendered 
a decision  in  1902  which  declared  the  Illinois  anti-trust 
law  unconstitutional  because  of  a clause  exempting  labor 
organizations  from  its  exactions.  The  Texas  law  of  1899 
contained  almost  identically  the  same  clause,  and  its  va- 
lidity was  doomed.  The  legislature  enacted  a new  and 
milder  law  on  March  31,  1903.  This  law  provided  maxi- 
mum penalties  of  $50  a day  instead  of  $5000,  a reduction 
which  leads  me  to  the  conclusion  that  at  least  one  of 
these  laws  was  unjust — but  it  is  conceded  that  I know 
nothing  about  law.  In  this  defect  I am  no  less  unfortu- 
nate than  are  four  of  the  nine  members  of  the  Supreme 
Court  of  the  United  States,  who  have  been  radically 
wrong  on  every  recent  occasion. 

For  three  and  a half  years  the  Waters  Pierce  Oil 
company  continued  to  operate  under  this  new  law,  and  in 
all  that  time  no  suit  was  brought  against  it  in  any  of 
the  243  counties  of  Texas.  Surely  the  officials  were  lax, 
or  else  the  company  conformed  to  the  law. 

WHY  SUIT  WAS  FINALLY  BROUGHT. 

Henry  Clay  Pierce  told  the  story  of  the  relations  ex- 
isting between  his  company  and  the  Standard  on  Septenv 
ber  10,  1906,  and  twelve  days  later  Attorney  General  Da- 
vidson filed  a suit  for  penalties  and  ouster  against  the 
Waters  Pierce  Oil  company.  Another  suit  was  brought 
charging  Mr.  Pierce  with  false  swearing — not  with  per- 
jury, as  is  frequently  stated  and  printed.  Perjury  and 
false  swearing  are  entirely  different  crimes,  and  those 
best  competent  to  judge  inform  me  that  Mr.  Pierce  will 
be  acquitted  by  the  evidence  which  I have  cited  when 
the  case  comes  to  trial. 

I shall  discuss  neither  of  these  cases  in  detail,  since 
both  are  now  before  the  courts  and  in  process  of  adju- 
dication, but  it  will  not  be  amiss  to  touch  on  certain 
points  which  are  not  in  legal  controversy,  and  on  which 
the  public  has  deliberately  been  misled. 


—49— 


J 

Both  of  these  suits  were  based  almost  entirely  on 
the  testimony  given  voluntarily  by  Mr.  Pierce  in  his  ex- 
amination before  Commissioner  Anthony  of  St.  Louis. 
In  neither  of  these  cases  has  Mr.  Pierce  taken  the  stand 
in  his  own  defense,  and  the  reason  for  this  is  found  in 
the  fact  that  his  presence  in  Texas  would  have  menaced 
his  liberty  through  the  operation  of  an  unjust  law  passed 
by  a former  legislature,  and  only  recently  repealed. 

This  absurd  law  provided  that  persons  charged  and 
indicted  for  a number  of  crimes  and  offenses — including 
false  swearing— should  be  denied  bail  while  they  were 
prosecuting  appeals  to  a higher  court.  In  that  respect 
it  classed  false  swearing  with  murder,  rape  and  other 
high  crimes,  and  presumed  a citizen  guilty  until  proved 
innocent.  It  was  so  manifestly  unjust  that  the  last  leg- 
islature repealed  it. 

Though  absolutely  convinced  of  his  innocence,  both 
legally  and  morally,  Mr.  Pierce  was  willing  and  eager  to 
risk  even  imprisonment  for  a period  as  the  price  for  the 
chance  to  clear  his  name  of  the  disgrace  attached  to  this 
indictment.  His  lawyers  convinced  him  that  no  assur- 
ance could  be  given  of  a fair  and  speedy  trial,  and  proved 
to  him  that  he  might  be  locked  up  in  Austin  for  an  indefi- 
nite period  pending  an  appeal. 

MALIGNANT  POLITICAL  PLOTTINGS. 

Had  Mr.  Pierce  surrendered  himself  to  the  Texas  au- 
thorities at  that  time  he  would  have  risked  unmerited  im- 
prisonment, great  financial  loss,  impairment  of  health, 
and  would  have  been  menaced  with  “legal  lynch  law.” 
He  was  then  engaged  in  vast  financial  operations,  includ- 
ing the  reorganization  and  merger  of  the  Mexican  Cen- 
tral railway  in  conjunction  with  the  Mexican  govern- 
ment, and  he  was  also  vitally  concerned  in  other  great 
iridustrial  enterprises.  Powerful  financial  interests  m 
New  York  were  operating  against  him,  millions  of  money 
and  his  commercial  prestige  were  at  stake,  and  yet  he 
has  been  denounced  unsparingly  by  cunning  demagogues 
because  he  availed  himself  of  the  law  and  resisted  ex- 
tradition rather  than  take  the  chance  of  having  to  remain 
indefinitely  in  an  Austin  cell,  on  an  unfounded  charge, 
and  on  account  of  a harsh  and  admittedly  unjust  act  of 
legislation. 

In  all  earnestness  I desire  to  record  my  deliberate 
opinion  that  this  is  the  most  contemptible  criticism  which 
has  been  leveled  against  Henry  Clay  Pierce.  Lawyer 
politicians  who  were  fully  aware  of  his  legal  rights,  and 
would  have  advised  him  to  do  just  as  he  did  do,  have 
hypocritically  incited  the  people  of  Texas  against  Mr. 
Pierce  because  he  used  the  provisions  of  a just  Federal  law  to 
protect  himself  against  the  tyranny  of  a despotic  State  law 
which  was  a blot  on  the  statute  books  of  Texas,  and  which 
was  repealed  when  its  rank  injustice  was  comprehended. 

Things  will  come  to  a fine  pass  in  the  United  States 
if  every  man  placed  under  the  ban  of  indictment  by  a 
State  grand  jury  is  to  be  excoriated  and  vilified  because 
he  does  not  at  once  leave  his  home  State  and  hasten  to 
the  State  where  the  indictment  is  preferred  pending  a 
final  judgment  in  his  case. 

APPEALS  TO  PASSION. 

Suppose  that  Mr.  Pierce  had  consented  to  waive  his 
legal  rights  and  submit  to  such  martyrdom?  He  would 
have  had  a fine  chance  for  a fair  trial  in  that  hysterical 
period,  would  he  not?  No  attempt  would  have  been 
spared  to  crucify  him  for  the  purpose  of  smirching  Sen- 
ator Bailey.  The  political  malcontents  who  then  ap- 
pealed to  the  passions  and  prejudices  of  the  masses  cared 


nothing  about  the  guilt  or  innocence  of  Henry  Clay 
Pierce.  They  did  not  then  and  do  not  now  care  a con- 
tinental whether  or  not  the  Waters  Pierce  Oil  company 
is  a trust,  and  they  are  not  concerned  whether  oil  costs 
10  cents  or  20  cents  a gallon. 

They  have  but  one  end  in  view — political  offices — 
with  salaries,  perquisites,  commissions,  fees,  graft — and 
their  means  to  that  end  are  to  load  on  the  shoulders  of 
the  Standard  Oil  company,  and  then  to  charge  Senator 
Bailey  for  the  responsibility  of  the  corporate  existence 
in  Texas  of  the  Waters  Pierce  Oil  company.  They  want- 
ed a victim,  they  wished  to  make  an  “example  of  a mil- 
lionaire,” and  they  selected  Henry  Clay  Pierce,  the  man 
who  as  a boy  risked  his  life  and  health  in  founding  a 
great  industry  in  Texas  when  it  was  a wilderness,  who  won 
his  way  to  success  because  of  executive  genius  and  in- 
domitable energy,  whose  alleged  crime  is  that  he  has  so 
perfected  a vast  trading  organization  that  he  can  and 
does  sell  oil  cheaper  than  any  of  his  competitors  and 
still  make  a profit  on  it — this  was  the  man  they  se- 
lected for  sacrifice  on  the  altar  of  partisan  chicane — and 
they  still  fill  the  air  with  their  deceitful  protests  because 
Mr.  Pierce  does  not  deliver  himself  into  their  hands. 

THE  RECENT  TRIAL. 

I have  talked  with  hundreds  of  business  men,  law- 
yers, manufacturers,  merchants  and  farmers  in  every  sec- 
tion of  Texas,  and  I state  it  as  an  absolute  fact  that  I 
have  never  heard  a bitter  expression  against  the  Waters 
Pierce  Oil  company  or  against  Mr.  Pierce.  I have  sound- 
ed strangers  who  did  not  know  that  I had  the  slightest 
interest  in  the  case,  and  their  most  common  remark  has 
been,  “It’s  just  politics,”  and  thus  dismiss  the  subject 
with  a weary  smile. 

I do  not  say  that  this  popular  estimate  is  true,  but 
there  is  no  manner  of  doubt  that  the  intelligent  people 
of  Texas  have  little  faith  that  the  Waters  Pierce  Oil  com- 
pany will  permanently  be  ousted  from  the  State,  that  it 
will  be  disrupted  and  its  property  confiscated  by  huge 
fines,  and  I fail  to  find  any  desire  that  any  such  penal- 
ties are  desired  by  the  fair-minded  people  of  Texas. 

Certain  of  my  critics  express  great  fear  lest  I shall 
show  disrespect  for  the  courts,  while  others  charge  me 
with  an  attempt  to  overrule  the  decisions  which  have 
been  rendered  against  the  Waters  Pierce  Oil  company. 
Unless  bewilderment  is  disrespect  I shall  be  able  to  es- 
cape punishment  on  the  first  count,  and  I accept  the 
second  warning  as  a complimentary  pleasantry. 

The  future  Balzac  will  have  a lot  of  fun  when  he  se- 
lects this  famous  case  for  the  purpose  of  ridiculing  the 
systems  of  laws  and  complications  of  courts  under  which 
we  now  exist.  Just  how  many  decisions  nave  been  ren- 
dered, and  how  the  score  stands  between  the  Waters 
Pierce  and  the  State  of  Texas  is  a matter  so  obscured 
in  judicial  statistics  and  hair-splitting  terminology  that  it 
would  be  rash  for  a mere  layman  to  hazard  an  estimate. 

Of  one  thing  I am  sure:  It  all  costs  a lot  of  money, 

and  when  it  is  ended  the  people  of  Texas  will  find  that 
they  have  paid  the  bill,  or  will  pay  the  bill,  no  matter 
which  side  wins.  A State  can  fine  a corporation,  tax  a 
corporation  any  amount  the  law  will  allow;  it  may  adopt 
all  possible  expedients  to  put  money  into  its  treasury, 
but  in  the  long  run  every  penny  of  it  will  come  out  ot 
the  pockets  of  its  own  people,  and  the  more  the  lawyers 
get  the  less  there  will  remain  for  public  improvements 
and  education.  Please  don’t  forget  that;  it  is  a homely 
truth. 


—50— 


^VHICH  JUDGE  BKOOKS  WAS  RIGHT? 

The  first  Waters  Pierce  Oil  company  was  ousted 
from  Texas  in  consequence  of  a jury  verdict  in  a trial  at 
Austin  in  1897  before  Judge  R.  E.  Brooks.  The  present 
Waters  Pierce  Oil  companj"  was  ousted  from  Texas  in 
consequence  of  a jury  trial  in  a trial . at  Austin  in  1907 
before  Judge  V.  L.  Brooks. 

I desire  to  call  attention  to  a detail  which  I have 
not  seen  mentioned,  and  which  is  most  mystifying  to  the 
non-judicial  mind,  and  that  detail  is  this: 

In  both  trials  the  prosecution  laid  special  stress  on 
the  alleged  fact  that  the  Waters  Pierce  Oil  companj 
was  in  a trust  alliance  with  the  Standard  Oil  company. 
The  evidence  adduced  at  both  trials  was  practically  iden- 
tical so  far  as  showing  the  relationship  between  the  two 
corporations.  On  both  occasions  it  was  claimed  and 
tacitly  admitted  that  the  Standard  had  the  right  to  de- 
mand legal  control,  and  in  both  trials  the  defense  urged 
that  actual  control  was  vested  in  Mr.  Pierce  and  exercised 
by  him. 

In  both  trials  testimony  was  offered  to  show  that  the 
Waters  Pierce  Oil  company  had  raised  and  lowered 
prices  for  the  purpose  of  meeting  or  defeating  competi- 
tion; that  it  had  granted  rebates;  that  it  had  purchased 
the  plants  of  rival  concerns,  and  that  it  had  used  other 
expedients  to  hold  and  extend  its  trade.  Practically  all 
of  the  adverse  testimony  used  in  the  first  trial  was  ad- 
mitted at  the  second,  despite  the  fact  that  the  defend- 
ant company  was  not  organized  until  nearly  three  years 
after  the  jury  verdict  was  rendered  against  the  old  com- 
pany, and  despite  the  fact  that  the  judge  in  the  second 
trial  excluded  most  of  it  in  his  charges  to  the  jury,  not, 
however  until  the  minds  of  the  jurymen  had  been  preju- 
diced by  confusing  the  offense  of  the  old  and  dead  com- 
pany with  one  then  on  trial. 

Bear  in  mind  that  the  relations  existing  in  1897  be- 
tween the  old  Waters  Pierce  and  the  Standard  were  the 
same  as  those  which  prevailed  when  the  present  Waters 
Pierce  Oil  company  was  prosecuted  by  Attorney  Gen- 
eral Davidson  in  1907,  and  then  account  for  this: 

In  the  trial  of  1897  Judge  R.  E.  Brooks  instructed  the 
jury  to  the  effect  that  the  Waters  Pierce  Oil  company 
could  not  be  incriminated  on  account  of  its  relations  to 
the  Standard  Oil  company,  and  that  its  guilt  or  innocence 
depended  almost  entirely  on  its  alleged  granting  of  re- 
bates and  its  alleged  making  of  exclusive  contracts.  His 
ruling  was  to  the  effect  that  the  ownership  by  the  Stan- 
dard of  a portion  of  the  stock  of  the  Waters  Pierce  did 
not  implicate  the  latter  as  a trust. 

That  is  the  plan  purport  of  the  ruling  made  in  1907 
by  Judge  R.  E.  Brooks — if  I understand  the  English  lan- 
guage, and  I hope  I do. 

He  excluded  the  Standard  Oil  agreement  and  all 
other  evidence  concerning  the  great  oil  trust,  and  the 
jury  brought  in  a verdict  based  entirely  on  the  evidence 
which  showed  that  the  Brownsville  agent  had  granted 
rebates  and  had  made  exclusive  contracts,  and  the  higher 
courts  finally  ousted  the  Waters  Pierce  from  Texas  on 
that  account. 

A REMARKABLE  CONTRADICTION. 

In  the  recent  trial  Judge  V.  L.  Brooks  admitted  evi- 
dence of  wide  range.  I now  quote  extracts  from  his 
charges  to  the  jury,  eliminating  superfluous  phrases,  but 
preserving  his  exact  meaning.  In  charge  III  Judge 
Brooks  said,  in  effect,  to  the  jury: 


“Oil  and  other  products  of  petroleum,  which  the  Wa- 
ters Piere'e  Oil  company  may  have  purchased  or  acquired 
in  any  manner  outside  the  State  of  Texas,  and  which  it 
has  caused  to  be  shipped  into  Texas,  are  subjects  of  in- 
terstate commerce,  and  so  remain  until  they  are  removed 
from  their  original  packages,  tanks,  vessels,  etc.  The 
anti-trust  laws  of  Texas  have  no  reference  to  agreements 
or  pools  or  arrangements  of  any  kind  concerning  sub- 
jects of  interstate  commerce,  and  no  agreement,  pool  or 
other  arrangement  which  the  Waters  Pierce  may  have 
entered  into  with  reference  to  an  interstate  product  can 
be  considered  by  you  as  violating  any  anti-trust  law  of 
Texas.” 

Read  that  over  again  carefully.  I take  it  that  it  meant 
that  it  was  no  concern  of  the  jury  what  manner  of  alli- 
ance existed  between  the  Waters  Pierce  and  the  Stan- 
dard, so  long  as  the  latter’s  products  were  purchased  or 
acquired  in  any  manner  from  some  point  outside  of 
Texas.  Of  course,  if  the  Waters  Pierce  later  violated 
the  anti-trust  laws  in  its  retailing  of  the  oil  obtained 
from  the  Standard,  it  could  be  prosecuted  and  punished, 
but — and  bear  this  in  mind— Judge  V.  L.  Brooks,  in  the 
last  trial  of  the  Waters  Pierce,  distinctly  told  the  jury 
that  no  evidence  of  importance  to  that  purport  had  been 
produced,  and  he  excluded  its  consideration  from  the 
twelve  jurymen. 

Now  note  the  conclusion  of  charge  III,  in  effect  as 
delivered  by  Judge  Brooks: 

“But  oil  purchased  by  the  Waters  Pierce  from  the 
Corsicana  refinery  or  any  other  refinery  in  Texas,  and 
oil  purchased  outside  the  State  and  removed  from  its 
original  packages  is  not  the  subject  of  interstate  com- 
merce, and  any  agreement,  pool  or  other  arrangement  en- 
tered into  by  the  Waters  Pierce  with  reference  to  such 
products  is  in  violation  of  the  anti-trust  laws  of  the 
State.” 

I have  no'  contempt  for  such  a ruling,  but  I have 
unmeasured  contempt  for  such  a law,  and  I imagine  that 
the  people  of  Texas  will  agree  with  me  when  they  come 
to  understand  what  it  means.  It  means  that  it  is  not 
unlawful  to  purchase  in  bulk  oil  refined  by  the  Standard 
Oil  company  in  Whiting,  Ind.,  or  Bayonne,  N.  J.,  or  any 
other  outside  plant  owned  by  the  trust,  but  that  it  is  a 
crime  to  buy  oil  from  an  oil  refinery  owned  by  the  Stan- 
dard in  Texas — one  which  gives  employment  to  Texans, 
and  which  adds  to  the  prosperity  and  upbuilding  of  the 
Lone  Star  State. 

If  it  be  the  proper  thing  for  Texans  to  encourage 
the  refining  of  oil  in  Whiting  and  Bayonne,  and  to  make 
it  a crime  to  patronize  a home  enterprise  why  on  earth 
does  not  Texas  justice  close  down  the  Corsicana  and  all 
other  refineries  and  treat  them  as  if  they  were  manufact- 
urers of  dynamite  bomljs? 

LIMIT  OF  JUDGE  BROOKS’  CHARGE. 

Charges  VII  to  XI,  inclusive,  pertained  to  the  ques- 
tion of  whether  or  not  there  was  any  arrangements  ex- 
isting between  the  Waters  Pierce  Oil  company  and  the 
Standard,  and  the  nature  and  scope  of  such  arrangements, 
if  any. 

, This  was  the  very  issue  excluded  by  Judge  R.  E. 
Brooks  in  the  trial  of  the  old  company  in  1897,  but  ten  years 
later  a Travis  county  jury  and  a Travis  county  judge  re- 
versed that  issue,  acquitted  the  company  on  charges  which 
previously  ousted  it  from  Texas  and  convicted  it  on  counts 
which  an  able  judge  ruled  should  not  be  considered. 

Surely  the  ways  of  the  law  of  the  courts  are  beyond 
the  comprehension  of  the  finite  mind. 

I have  repeatedly  declared  that  the  Waters  Pierce 
Oil  company  has  conformed  strictly  to  the  letter  and 
spirit  of  the  anti-trust  laws  of  Texas  since  it  was  admit- 


—51— 


ted  to  do  business  on  May  31,  1900.  Mr.  Pierce  gave  his 
pledge  that  it  would  do  so.  I have  stated  tha^  the  ques- 
tion whether  or  not  the  ownership  of  Waters  Pierce  stock 
by  Standard  Oil  interests  was  illegal,  was  an  issue  which 
must  be  passed  on  by  the  higher  courts,  and  that  it  is  a 
matter  of  much  moment  that  its  final  adjudication  may 
revolutionize  our  industrial  system. 

Yet  such  was  the  great  economic  question  which  was 
submitted  to  the  decision  of  twelve  jurymen,  presumably 
of  average  intelligence,  and  they  undoubtedly  decided 
honestly  and  to  the  best  of  their  ability,  but  it  is  absurd 
to  assume  that  their  verdict  will  settle  this  most  vital 
question.  The  point  I am  making  is  this:  The  jury 

in  the  last  trial  of  the  Waters  Pierce  Oil  company  con- 
victed it  because  of  the  admission  of  the  evidence  given 
by  Henry  Clay  Pierce  on  the  witness  stand  in  St.  Louis, 
some  months  previously,  which  evidence  was  to  the 
effect  that  a majority  of  the  stock  of  the  Waters  Pierce 
had  passed  to  the  ownership  of  Standard  Oil  interests. 

PRACTICAL  ACQUITTAL  OF  THE  WATERS  PIERCE. 

The  jury  in  1907  acquitted  the  Waters  Pierce  Oil 
company  of  all  specific  violations  of  the  Texas  anti-trust 
laws.  I doubt  if  many  readers  are  aware  of  that  fact. 
They  have  heard  much  about  the  “lawlessness”  of  this 
corporation  since  its  admission  to  Texas  in  1900,  and 
have  assumed  that  the  jury  punished  it  because  of  these 
crimes  against  competition. 

The  prosecuting  officials  raked  Texas  for  evidence 
against  the  company.  Dealers  and  customers  were  inter- 
viewed, and  on  all  sorts  of  pretexts  placed  on  the  stand 
with  a view  of  implicating  the  company  in  some  specific 
violation  of  the  law.  Read  their  testimony.  It  is  an 
amusing  attempt  to  charge  criminality  on  a company 
which  has  made  the  most  zealous  endeavor  to  conform  to 
the  law. 

You  need  not  take  my  word  for  it.  Read  the  follow- 
ing charge  to  the  jury  by  Judge  Brooks,  and  you  will 
obtain  a clear  idea  of  how  much  truth  there  is  in  the 
charges  of  lawlessness  against  the  present  Waters  Pierce 
Oil  company.  In  charge  XII  Judge  Brooks  thus  instruct- 
ed the  jury,  and  gave  the  Waters  Pierce  Oil  company 
a clean  bill  of  health  on  all  counts  save  its  alleged  alli- 
ance with  the  Standard. 

“Evidence  has  been  introduced  before  you  tending 
to  show  that  the  Waters  Pierce  Oil  company  has  given 
rebates  and  discounts  in  the  course  of  its  dealings;  evi- 
dence has  also  been  introduced  before  you  tending  to 
show  that  the  Waters  Pierce  Oil  company  has  made  con- 
tracts other  than  those  pertaining  to  its  alleged  relations 
with  the  Standard  Oil  company.  Evidence  has  also  been 
introduced  before  you  tending  to  show  the  general 
course  of  the  dealings  of  the  Waters  Pierce  Oil  company 
in  Texas  and  elsewhere,  including  some  of  its  business 
methods  in  meeting  competition.” 

Please  pay  particular  attention  to  how  Judge  Brooks 
dismissed  these  alleged  crimes  charged  against  this  “law- 
less” company: 

“You  are  instructed  that  none  of  this  evidence  shows, 
or  tends  to  show,  any  violation  of  the  anti-trust  laws 
of  Texas,  unless  it  tends  in  some  degree  to  establish 
some  one  or  more  of  the  issues  submitted  for  your  con- 
sideration in  the  last  mentioned  paragraphs  of  this 
charge  (those  alleging  an  alliance  between  the  Waters 
Pierce  and  the  Standard) ; and  you  are  therefore  instructed 
to  acquit  the  Waters  Pierce  Oil  company  and  return  a gen- 
eral verdict  for  it — notwithstanding  any  and  all  of  said  evi- 
dence, unless  you  find  for  the  State  on  the  issues  submitted 
for  your  consideration  in  some  one  or  more  paragraphs  of 
the  charge..” 


XOT  OXE  SHRED  OF  EVIDEXCE. 

In  plain  English  this  meant  that  since  May  31,  1900, 
not  one  shred  of  evidence  was  produced  in  Texas  even 
indicating  that  the  company  had  violated  the  law,  and 
that  the  whole  case  of  the  State  rested  on  the  relations 
which  had  been  forced  on  Mr.  Pierce  by  the  Standard 
Oil  company,  as  frankly  told  by  him  in  his  testimony. 

I challenge  my  critics  to  prove  that  I have  misrep- 
resented or  distorted  the  facts  in  this  case.  In  previous 
articles  I have  stated  that  the  case  against  Mr.  Pierce 
and  his  company  rested  on  conditions  and  circumstances 
over  which  he  had  no  control,  and  that  the  issue  re- 
solved itself  into  the  legal  point  of  whether  or  not  it 
was  unlawful  for  the  Standard  to  own  stock  in  the  Wa- 
ters Pierce.  In  reply  to  this  statement,  my  critics  have 
retorted  that  the  Waters  Pierce  had  been  since  its  ad- 
mission into  Texas,  on  May  31,  1900,  and  that  it  is  now 
“a  persistent  violator  of  the  laws,”  that  it  is  a “commer- 
cial pirate,”  that  it  has  “throttled  competition,”  and  that 
it  has  been  “reckless  in  its  criminal  conspiracies  in  re- 
straint of  trade.” 

Editorial  writers  have  mockingly  advised  me  to  look 
up  the  record  of  the  testimony  and  rulings  in  the  last 
Travis  county  trial.  I already  knew  the  facts  and  was 
sure  of  my  ground,  and  I now  ask  certain  of  these  gen- 
tlemen, who  are  so  solicitious  about  “keeping  the  record 
straight,  if  they  will  print  a few  of  the  preceding  para- 
graphs concerning  the  charge  made  by  Judge  Brooks. 
Will  they  please  tell  their  readers  what  crime  the  Waters 
Pierce  has  committed  since  1900.?  Will  they  please 
point  out  some  specific  cases  of  “lawlessness”  submit- 
ted to  the  Travis  county  jury? 

The  terse  truth  of  the  matter  is  that  no  corpora- 
tion in  Texas  has  yielded  more  rigid  adherence  to  the 
laws  of  the  State  than  the  present  Waters  Pierce  Oil 
company.  All  of  the  potential  evidence  brought  out 
against  it  in  the  recent  trial  pertaining  to  alleged  of- 
fenses committed  in  other  States  and  was  based  on 
testimony  taken  in  St.  Louis  and  not  in  Austin. 

In  presenting  these  articles  to  the  people  of  Texas 
and  of  the  Southwest  I have  attempted  to  place  in  print 
the  concrete  facts  and  official  records,  in  the  belief  that 
a fair  presentation  of  the  truth  will  check  a campaign  of 
misrepresentation  and  abuse  which  has  had  its  motive 
and  inspiration  in  selfish  and  sordid  politics,  and  which 
has  harmed  Texas  far  more  than  it  has  Mr.  Pierce  or  his 
company. 

Before  closing  this  series  I wish  to  touch  briefly  on 
one  or  two  matters  in  which  the  public  has  a direct 
personal  interest  and  concerning  which  it  has  been  mis- 
led. 

SETEK  HUNDRED  PER  CENT.  PROFIT. 

When  asked  as  a witness  by  Attorney  General  Had- 
ley if  it  were  not  true  that  the  profits  of  the  Waters 
Pierce  Oil  company  had  not  averaged  400  per  cent  profit 
annually,  Henry  Clay  Pierce  replied  that  the  profits  had 
ranged  from  600  to  700  per  cent  profit  on  its  capital  stock 
in  recent  years. 

Standing  by  itself  this  was  a startling  declaration, 
and  the  sensational  papers  made  much  of  it.  The  head- 
lines flamed  with  such  captions  as,  “Astounding  Profits  of 
the  Oil  Trust!”  “Seven  Hundred  Per  Cent  Profit  for 
Monopoly!”  and  similar  appeals  to  the  wonder  and  im- 
agination of  those  who  read  but  rarely  think. 

Mr.  Pierce  was  given  no  chance  to  make  the  plain 
and  truthful  explanation  I now  present  to  those  who 
wish  to  be  fair  in  their  consideration  of  this  question. 


—52— 


There  is  absolutely  no  connection  between  the  capi- 
tal stock  of  a company  or  corporation  and  the  profits 
it  can  legitimately  earn.  This  blunt  aphorism  will  suf- 
fice for  the  economic  student,  but  I will  attempt  to  make 
it  clear  to  those  who  pay  little  attention  to  such  ques- 
tions. 

One  of  the  corporate  abuses  from  which  the  United 
States  is  peculiarly  the  sufferer  is  that  of  overcapitaliza- 
tion— commonl}'  known  as  “watered”  stock.  The  con- 
ventional method  of  the  scheming  and  inherently  dishon- 
est financier  is  to  gain  possession  or  control  of  a prosper- 
ous industrial  enterprise,  load  it  down  with  bonds  and 
stocks — the  proceeds  of  which  go  into  his  pocket — with 
the  additional  purpose  of  disguising  the  actual  profits 
derived  from  operation.  The  amount  of  such  fictitious 
stock  issued  against  railroads,  manufacturing  estab- 
lishments, steel  plants,  mines  and  enterprises  of  all  kinds 
mounts  into  billions  of  dollars  in  paper  values. 

There  are  other  concerns  which  pay  no  attention 
to  the  amount  of  their  capital  stock.  I have  in  mind 
a great  newspaper  which  was  incorporated  more  than 
half  a century  ago  with  a capital  stock  of  $10,000,  the 
amount  of  which  has  not  been  increased  since  then.  Its 
actual  property  and  good  will  could  not  be  purchased 
for  $8,000,000,  and  it  makes  a clear  annual  profit  of  not 
less  than  $800,000.  This  is  8000  per  cent  profit,  but  no 
one  cares,  the  law  does  not  intervene,  and  has  no  right 
to  intervene. 

The  original  stock  of  the  Waters  Pierce  Oil  com- 
,pany  was  $100,000.  In  1882  this  was  increased  to  $400,- 
000,  and  the  present  Waters  Pierce  Oil  company  was  or- 
ganized with  a capital  in  that  nominal  amount.  The 
assets  and  good  will  of  the  company  were  then  many 
times  that  amount,  but  there  was  and  should  be  no  law 
against  undercapitalization. 

At  the  time  that  Mr.  Pierce  testified  that  the  annual 
profits  of  the  Waters  Pierce  Oil  company  were  from  600 
to  700  per  cent  on  its  capitalization  of  $400,000  it  was 
the  absolute  owner  of  actual  property  worth  not  less 
than  $12,000,000,  and  its  prestige  and  good  will  gave  it 
a market  value  of  not  less  than  $45,000,000.  The  highest 
profits  ever  realized  by  the  company  were  $2,790,000,  and 
these  were  derived  in  the  year  preceding  the  one  in 
which  Mr.  Pierce  gave  his  testimony.  This  was  672  per 
cent  on  the  nominal  capitalization  of  the  company — which 
means  absolutely  nothing — but  only  23  per  cent  on  the 
property  actually  employed  in  the  distribution  and  sale 
of  the  products  of  petroleum,  and  only  about  6 per  cent 
on  the  fairly  appraised  value  of  the  assets  and  legiti- 
mate good  will  of  the  business  reared  by  Mr.  Pierce. 
WHAT  MB.  PIERCE  MIGHT  HAVE  DONE. 

Mr.  Pierce  could  easily  have  avoided  the  criticism 
levelled  against  him  because  of  the  fact  that  the  stock 
of  his  company  paid  dividends  of  several  hundred  per 
cent.  He  could  have  watered  the  stock  from  $400,000 
to  $75,000,000,  and  have  hired  a Lawson  to  induce  the 
people  of  Texas  and  elsewhere  to  buy  $35,000,000  of  it  in 
small  lots.  He  and  his  associate  could  then  have  placed 
this  money  in  their  pockets,  still  retaining  control. 

They  could  then  indulge  in  all  the  familiar  expedients 
of  “high  finance.”  They  could  and  doubtless  would  list 
this  watered  stock  on  Wall  Street,  raise  and  lower  its 
selling  price  at  will,  and  fleece  the  dear  public  out  of 
millions  annually  on  its  manipulated  fluctuations.  On 
the  plea  that  the  stock  could  not  earn  enough  on  a 
margin  of  a profit  of  a cent  a gallon,  they  could  increase 
the  price  of  oil  sufficiently  to  double  and  treble  this  profit. 


Suppose  that  Texas  or  any  other  State  protested 
against  this  increased  price  of  oil;  suppose  that  suits  were 
brought  seeking  to  lower  the  price  of  oil  and  the  cur- 
tailment of  the  profits  of  this  $75,000,000  corporation— 
what  then  would  happen?  The  Waters  Pierce  Oil  com- 
pany has  been  making  $2,500,000  on  its  capitalization  of 
$400,000;  it  makes  $5,000,000  on  its  capitalization  of  $75,- 
000,000,  or  about  6 per  cent.  What  would  happen,  I ask, 
if  the  State  of  Texas  attempted  to  reduce  its  earnings? 
You  know  what  would  happen. 

The  cry  would  be  raised  that  the  State  was  attempt- 
ing to  reduce  dividends  below  a reasonable  figure.  The 
plea  would  be  voiced  that  “innocent  investors  and  wid- 
ows and  orphans”  were  confronted  with  loss  of  a fair 
income;  there  would  be  a general  howl  about  “confisca- 
tion,” and  beyond  any  reasonable  doubt  some  court  would 
grant  an  injunction  restraining  the  State  from  persecut- 
ing the  $75,000,000  Waters  Pierce  Oil  company. 

Mr.  Pierce  should  have  adopted  this  course.  He 
then  could  have  posed  as  a martyr,  and  could  have  called 
down  on  the  prosecuting  officials  the  wrath  of  tile  thou- 
sands of  men  and  women  who  had  purchased  his  stock. 
Instead  of  adopting  this  modern  policy  of  spoliation  he 
has  been  content  to  fix  prices  at  a figure  yielding  less 
than  the  average  profit  on  money  invested  in  the  aver- 
age manufacturing  or  trading  enterprise,  and  has  made 
the  mistake  of  assuming  that  the  public  does  not  wish 
to  be  humbugged  and  plundered. 

ACTUAL  PROFITS  IN  RETAILING  OIL. 

There  is  no  secret  about  the  profits  made  on  the 
various  grades  of  oil  handled  by  the  Waters  Pierce  Oil 
company  and  the  other  concerns  which  now  are  com- 
peting with  it  for  the  trade  of  Texas  and  the  Southwest. 
I recently  addressed  a letter  to  Mr.  Clay  A.  Pierce,  pres- 
ident of  the  Waters  Pierce  Oil  company,  requesting  an 
official  statement  of  the  percentage  average  of  dividends 
to  the  total  value  of  sales. 

In  reply  Mr.  Pierce  stated  that  the  dividend  earnings 
in  1904  were  11.47  per  cent  of  the  total  value  of  the 
sales.  In  1905  the  percentage  was  13.46  and  in  1906  it 
dropped  to  10.53  per  cent. 

No  well-informed  oil  man  will  question  the  accuracy 
of  these  figures.  What  do  they  mean?  They  mean  that 
for  years  the  Waters  Pierce  Oil  company  has  distributed 
and  sold  kerosene  at  a profit  to  itself  of  less  than  one 
cent  a gallon,  and  it  can  be  proved  by  unmistakable  evi- 
dence that  at  most  times  its  actual  net  profits  on  kerosene, 
the  commodity  most  commonly  used  by  the  people  of  Texas, 
has  been  nearer  a half  a cent  a gallon. 

WHAT  TEXAS  PATS  FOR  OTHER  THINGS. 

I have  spent  a year  in  Texas,  have  visited  many  sec- 
tions of  it,  have  resided  in  the  large  cities,  and  have 
investigated  to  the  best  of  my  ability  the  cost  of  living 
in  each  place  visited.  The  fact  that  I am  not  a native  of 
Texas  does  not  lessen  my  powers  of  observation,  and 
does  not  impair  my  capacity  to  arrive  at  a fair  conclu- 
sion, and  I am  going  to  give  it  just  as  I believe  it. 

My  profession  has  called  me  for  the  last  twenty 
years  into  every  State  and  Territory  in  the  Union,  and 
I have  tried  to  keep  in  touch  with  matters  of  public  in- 
terest. I wish  now  to  record  my  deliberate  opinion  that 
there  are  few  States  in  this  nation  of  ours  in  which  the 
prices  of  all  the  ordinary  commodities  used  by  the  peo- 
ple is  held  at  figures  so  unfairly  high  as  in  Texas,  and 
I know  of  no  State  in  which  the  people  get  so  little  mer- 
cantile products  for  their  money. 


—53— 


I also  wish  to  record  my  sincere  belief  that  these 
high  figures  are  maintained  by  all  sorts  of  combinations 
and  conspiracies  in  restraint  of  trade.  The  farmer  gets 
a low  price  for  his  eggs,  his  vegetables  and  all  the  things 
he  'produces  by  manual  labor,  but  before  they  reach  the 
tables  of  the  consumers  in  Texas  cities  the  prices  have 
mounted  to  figures  higher  than  those  charged  in  New 
York  City,  Chicago  or  any  other  of  the  great  centers 
of  population. 

Practically  the  same  is  true  of  everything  demanded 
by  those  who  live  in  Texas  cities.  I could  go  into 
particulars,  but  every  intelligent  citizen  knows  the  facts, 
and  has  protested  unavailingly  against  them. 

THE  ONE  CHEAP  COMMODITY. 

There  are  local  pools,  country  organizations.  State 
associations,  each  and  all  striving  to  mount  the  price 
of  every  commodity  they  control,  or  aim  to  control, 
higher  and  higher.  You  can  buy  Texas  beef  cheaper 
in  St.  Paul  than  you  can  in  Houston,  you  can  purchase 
Texas  strawberries  cheaper  on  Broadway  than  you  can 
in  Corpus  Christi — all  because  of  the  unrestrained  greed 
of  lawless  pools  and  associations  which  defy  the  anti- 
trust laws  of  Texas,  and  work  without  fear  of  punishment 
from  the  State  prosecuting  officials. 

T have  found  only  one  commodity  in  Texas  which  is 
sold  at  a fair  price — oil.  It  is  sold  at  a fraction  of 

the  price  demanded  and  obtained  for  bottled  waters  that 
flow  freely  from  the  soil  of  Texas.  I can  buy  all  the 


oil  I call  for  from  any  one  of  the  hundreds  of  agents 
of  the  Waters  Pierce  Oil  company  in  Texas  at  12  or  13 
cents  a gallon;  I can  not  buy  a gallon  of  mineral  water 
at  any  place  I know  of  in  Texas  for  less  than  $5  for  a 
dozen  gallons,  which  is  more  than  40  cents  a gallon. 
Waters  from  points  out  of  the  State  are  much  higher  than 
this. 

It  has  been  adjudged  a crime  to  make  a profit  of  a 
cent  on  oil  for  each  gallon  refined  and  transported  long 
distances,  but  the  attorney  general  of  Texas  is  too  busy 
fighting  the  Waters  Pierce  and  running  for  a third  term 
to  pay  the  slightest  attention  to  those  conspirators  who 
have  robbed  the  producer  and  the  consumer  alike,  and 
many  of  whom  are  shrilly  shouting  “Stop  thief!”  in  the 
hope  of  continuing  their  operations.  It  is  the  irony  of 
fate  that  the  anti-trust  laws  of  Texas  have  found  only 
one  victim  of  consequence,  and  that  the  most  damning 
crime  charged  against  this  corporation  is  that  it  sells 
its  wares  so  low  that  competition  can  not  exist  against 
it. 

If  some  of  the  statesmen  and  patriots  who  have  been 
active  in  a certain  phase  of  this  matter  succeeds  in  de- 
stroying the  Waters  Pierce  Oil  company  and  of  “rein- 
stating competition,”  there  will  speedily  come  a day 
when  kerosene  will  rise  to  the  price  of  water,  and  when 
there  will  be  as  much  incentive  to  go  into  the  oil  busi- 
ness as  there  is  now  to  get  into  office — but  what  will  you 
gain  by  it,  my  friend,  you  who  have  patiently  heard  me 
to  a finish? 


ADDENDA 


The  following  letter  from  Henry  Clay  Pierce  to 
former  Governor  Joseph  D.  Sayers,  of  Texas,  is  an 
interesting  contribution  to  the  history  of  this  famous 
•case.  It  was  written  by  Mr.  Pierce  on  the  day  when 
the  present  Waters  Pierce  Oil  company  was  granted  a 
permit  to  do  business  in  Texas.  The  suggestion  that 
■such  a letter  be  written  came  from  Governor  Sayers,  who 
.also  requested  that  it  be  given  wide  circulation. 

With  the  sole  exception  of  a few  political  conspir- 
ators, there  was  no  faction  or  class  which  was  not 
pleased  that  an  arrangement  had  been  made  by  which 
this  great  enterprise  was  privileged  to  continue  business 
in  Texas.  The  press  throughout  the  State  published  con- 
gratulatory editorials  and  there  was  general  satisfaction 
that  a great  property  had  not  been  ruined  by  legal 
complications.  It  was  only  asked  that  the  new  Waters 
Pierce  Oil  company  should  obey  the  law.  I have  con- 
clusively proved  that  its  record  since  that  time  has  been 
•so  clean  that  Judge  Brooks,  in  the  Travis  county  trial 
of  1907,  instructed  the  jury  to  acquit  it  of  all  specific 
■charges  of  infractions  of  the  anti-trust  laws,  and  hinged 
its  guilt  or  innocence  on  the  question  of  whether  the 
ownership  by  the  Standard  Oil  company  of  a portion 
■of  its  stock  was  in  violation  of  the  law. 

The  attitude  of  Mr.  Pierce  at  the  time  when  the 
•present  company  entered  Texas  is  clearly  shown  in  the 
following  letter: 


Austin,  Texas,  May  31,  1900. 

To  His  Excellency,  Joseph  D.  Sayers,  Governor  of  the 
State  of  Texas. 

Dear  Sir — So  much  of  a false  and  m^leading  charac- 
ter has  been  published  concerning  the  legal  controversy 
which,  during  the  past  five  years,  has  existed  between 
the  State  of  Texas  and  the  Waters  Pierce  Oil  company 
that  it  seems  proper  that  I should  acquaint  the  people 
of  Texas  with  the  facts.  < 

In  this  connection  a brief  history  of  the  petroleum 
business  in  Texas  may  prove  interesting. 

About  thirty  years  ago,  when  the  writer  first  visited 
the  State,  the  very  limited  quantity  of  petroleum  oils 
therein  was  imported  in  tin  cans  from  New  York  via 
water  to  Galveston  and  thence  shipped  to  interior  points. 
The  usual  loss  from  leakage  resulting  from  this  method 
of  obtaining  supplies  averaged  20  per  cent,  all  of  which 
was  ultimately  borne  by  the  consumer. 

When  the  railroads  first  reached  the  State  from  the 
north,  H.  C.  Pierce  & Co.  commenced  shipping  petro- 
leum oils  in  railroad  lots  to  all  points  in  Texas  then 
reached  by  railways,  and  to  insure  economy  in  handl- 
ing and  avoid  loss  from  leakage,  established  depots  and 
agencies  in  the  principal  cities  and  towns  from  which 
sales  and  shipments  were  made  to  supply  the  entire 
State.  As  the  railroads  were  extended,  carloads  were  for- 
warded upon  construction  trains  to  the  ends  of  the  roads 
and  sales  made  from  the  car,  so  that  in  many  cases  oils 
were  the  first  article  of  merchandise  transported  by  the 
new  mileage  of  the  railroads  and  an  oil  depot  was  the 
first  storage  building  erected  in  the  newly  established 
towns. 


—54— 


A uniform  schedule  of  prices  was  established,  vary- 
ing only  according  to  differences  in  costs  of  freights 
and  the  salesmen  representing  jobbing  houses  through- 
out the  State  could  sell  petroleum  oils  at  schedule 
prices  and  make  deliveries  of  full  quantities  from  any  of 
the  oil  depots  of  H.  C.  Pierce  & Co.,  thereby  placing  all 
merchants,  buyers  and  towns  in  Texas  upon  an  equal 
footing  as  to  petroleum  oils  and  avoiding  the  great  loss 
from  leakage  when  petroleum,  shipments  were  made  in 
any  quantity  by  water  or  in  less  than  carloads  by 
rail. 

The  firm.  Waters,  Pierce  & Co.,  succeeded  H.  C. 
Pierce  & Co.,  March,  1877,  and  commenced  shipping 
oils  in  tank  cars  to  its  Texas  depots,  where  it  was  placed 
in  wooden  barrels  or  tin  cans  for  distribution. 

This  method  of  transportation  avoided  all  loss  from 
leakage  between  the  Northern  well  producing  points  and 
the  packing  stations  in  Texas,  and  necessitated  the  con- 
struction of  iron  tanks  and  other  plants. 

May  7,  1878,  the  Waters  Pierce  Oil  company  succeed- 
ed Waters,  Pierce  & Co.,  and  during  this  same  year 
introduced  in  the  Cit>"  of  St.  Louis  the  first  tank 
wagons  ever  used  by  anyone  for  delivering  petroleum 
oils  direct  from  storage  tanks  to  retailers. 

During  many  years  the  system  consisted  of  tank  cars 
for  transporting  large  quantities  of  petroleum  in  bulk  to 
storage  depots;  tank  wagons  for  delivery  in  the  cities 
and  towns,  and  wood  barrels  and  tin  cans  for  distributing 
oils  to  points  between  storage  stations — such  were  the 
methods  employed  by  the  Waters  Pierce  Oil  company  to 
supply  its  trade  in  Texas. 

Finding  that  great  loss  resulted  to  purchasers  of 
petroleum  oils  in  wood  barrels  and  that  the  use  of  tin 
cans  was  excessively  expensive,  the  Waters  Pierce  Oil 
company — who  were  the  first  handlers  of  petroleum  oils 
to  introduce  iron  barrels — supplied  them  to  all  its  stor- 
age stations  in  Texas  and  inaugurated  a system  of  loan- 
ing them  to  its  country  customers. 

This  brief  statem.ent  shows  that  the  entire  history 
of  the  Waters  Pierce  Oil  company  and  its  predeces- 
sors has  been  one  of  constant  progress  in  the  best  and 
cheapest  methods  of  supplying  petroleum  oils  to  the  peo- 
ple of  Texas. 

Today  Te.xas  is  furnished  by  the  Waters  Pierce  Oil 
company  with  petroleum  oils  of  the  best  quality  and  by 
the  most  convenient  and  economical  methods  known 
throughout  the  world. 

Formerly  oils  supplied  by  the  Waters  Pierce  Oil 
company  in  Texas  were  transported  in  tank  cars  from 
Pennsylvania  via  all  rail,  and  selling  prices  in  Texas  were 
of  necessity  low  enough  to  meet  the  cost  of  competing 
oils  arriving  via  the  cheaper  water  route  from  New 
York. 

Since  the  interstate  commerce  law  was  passed  the 
Waters  Pierce  Oil  company  has  not  paid  to  any  rail- 
road within  the  State  of  Texas  or  elsewhere  in  the  United 
States  less  than  its  full  published  tariff  rates  of  freight 
and  has  not  received  any  rebates  or  other  advantage  from 
transportation  lines. 

The  application  of  the  most  approved  modern  meth- 
ods in  developing  the  petroleum  business  in  Texas  has 
resulted  in  the  investment  in  Texas  by  the  Waters  Pierce 
Oil  company  of  over  $2,000,000  in  money  distributed  in 
over  300  cities  and  towns  and  the  employment  of  over 
1200  residents  of  Texas  as  its  managers,  agents  and  rep- 
resentatives. 

In  addition  to  this  the  Waters  Pierce  Oil  company 
annually  buys  of  the  people  of  Texas  crude  cottonseed 
oil  and  other  products  of  its  soil  equal  in  value  to  nearly 
$3,000,000. 

General  competition  with  the  Waters  Pierce  Oil 
company  cannot  be  maintained  until  the  competitors 
equip  themselves  with  plants,  including  tank  cars,  pipe 
lines,  storage  tanks,  tank  wagons,  iron  barrels  and  other 
facilities  equal  to  those  now  possessed  by  the  Waters 
Pierce  Oil  company,  but.  nothwithstanding  this  fact,  the 
people  of  Texas  have  paid  for  their  petroleum  oils  prices 
affording  the  Waters  Pierce  Oil  company  less  per  cent 
of  profit  than  has  been  received  by  other  sellers  of  com- 
modities in  common  use. 

At  all  times,  in  every  way,  and  under  all  circum- 
stances, the  Waters  Pierce  Oil  company  has  been,  both 


as  suppliers  of  petroleum  oils  and  purchasers  of  Texas 
products,  of  the  greatest  benefit  to  the  people  of  Texas. 

Competitors  have  misrepresented  the  facts  because 
they  could  not  secure  or  profitably  hold  trade  without 
first  providing  themselves  with  facilities  equal  to  those 
of  the  Waters  Pierce  Oil  company. 

Recently  an  unsuccesful  applicant  for  the  agency 
of  the  Waters  Pierce  Oil  company  at  Brownsville,  Texas, 
telegraphed  your  Excellency  that  the  company  had  re- 
duced its  selling  prices  there  for  the  sole  purpose  pf 
preventing  competition. 

Investigation  proved  that  this  party,  in  trying  ta 
dispose  of  some  oil  he  had  received  in  tin  cans  from 
New  York,  cuts  the  Waters  Pierce  Oil  company’s  prices 
at  Brownsville  three-fourths  of  one  cent  per  gallon,  and 
failing  to  make  sales  because  the  merchants  gave  prefer- 
ence to  our  superior  packages  and  facilities,  he  assumed 
that  a reduction  in  selling  price  of  one-half  cent  per 
gallon,  which  the  Waters  Pierce  Oil  company  made  May 
17  applicable  everywhere,  was  only  applicable  to  Browns- 
ville, and  pursued  the  usual  course  of  such  persons. 

Thinking  people  will  understand  that  the  law  of  sup- 
ply and  demand  must  always  control:  also  that  sensible 
individuals  or  corporations  intending  to  continue  a suc- 
cessful business  do  not  improperly  advance  or  depress, 
prices  of  the  commodities  they  handle  or  otherwise  abuse- 
their  customers. 

The  prosecution  of  the  Waters  Pierce  Oil  company 
which  was  commenced  in  Waco  in  1895  was  based  upon, 
the  claim  that  the  Waters  Pierce  Oil  company  was  a. 
member  of  a trust  or  combination.  This  claim  was  made- 
and  disproved  in  the  suit  at  Austin  in  1897,  instituted  for 
the  forfeiture  of  the  company’s  license  to  transact  busi- 
ness in  Texas.  In  the  latter  case  the  evidence  showed,, 
and  the  judge  charged  the  jury  that  the  Waters  Pierce 
Oil  company  was  not  a member  of  the  Standard  Oil 
Trust. 

Naturally  under  the  circumstances,  the  Waters  Pierce 
Oil  company  defended  itself  through  the  courts,  but 
when  the  United  States  Supreme  Court  failed  to  pass- 
upon  the  constitutionality  of  the  Texas  anti-trust  laws, 
and  practically  said  that  even  if  the  law  was  unconstitu- 
tional, the  State  of  Texas  had  the  right — as  a reasonable 
regulation  imposed  upon  it  as  a foreign  corporation — to 
forfeit  the  license  of  the  Waters  Pierce  Oil  company  to- 
transact  business  in  Texas,  I immediately  surrendered 
myself  at  Waco  to  the  McLennan  county  authorities  un- 
der the  indictments  found  there  in  1895  charging  me 
with  violation  of  the  anti-trust  taws  of  Texas.  These 
gentlemen  assured  me  of  ineir  desire  and  intention  to- 
uphold  the  laws  of  Texas  without  unnecessarily  op- 
pressing individuals,  corporations  or  capital. 

Although  the  company’s  attorneys  contended  that 
the  decision  of  the  United  States  Supreme  Court  applied, 
only  to  the  license  in  existence  when  the  suit  was  filed! 
against  the  company  by  the  State  of  Texas,  which  license- 
expired  by  limitation  July  6,  1899,  and  before  the  de- 
cision was  rendered,  that  the  company  was  justly  en- 
titled to  a new  license.  Attorney  General  Smith  held  that 
under  the  decision  the  Waters  Pierce  OH  company  was 
forever  disbarred  from  transacting  any  other  than  inter- 
state business  in  Texas  and  refused  to  consent  to  a license- 
being issued. 

These  differences  of  opinion  have  not  been  allowed 
to  mar  our  conferences  held  for  the  purpose  of  decid- 
ing upon  the  best  means  of  enabling  the  State  officials 
to  vindicate  the  law  as  interpreted  by  Attorney  General- 
Smith.  Accepting  Attorney  General  Smith’s  interpreta- 
tion of  the  law,  the  Waters  Pierce  Oil  company,  which 
was  incorporated  in  Missouri  May  7,  1878,  was  dissolved 
on  the  28th  day  of  May,  1900,  and  the  new  Waters  Pierce- 
Oil  company  was  incorporated  under  the  laws  of  Mis- 
souri May  29,  1900.  A certificate  of  the  charter  of  the 
new  company  issued  by  the  Secretary  of  State  of  Mis- 
souri has  this  day  been  filed  with  Secretary  of  State 
Hardy,  consequently  the  State  of  Texas  has  issued  a 
license  to  the  Waters  Pierce  Oil  company  to  transact 
business  within  its  borders. 

The  old  Waters  Pierce  Oil  company  has  sold  and' 
transferred  its  entire  property  and  business  wherever 
situated  to  the  new  Waters  Pierce  Oil  company,  who  will’ 
continue  the  employes  and  business  of  the  old  company. 

In  conclusion,  I desire  to  assure  your  excellency  thaO 


—55— 


it  will  be  the  aim  of  myself  and  associates  to  conduct 
the  business  of  the  new  Waters  Pierce  Oil  company  in 
strict  conformity  with  the  laws  of  Texas. 

Respectfully, 

(Signed.)  HENRY  CLAY  PIERCE. 


HENRY  CL.YY  PIERCE  TO  GOV.  T.  M.  CAMPBELL. 

During  all  the  years  from  the  admission  of  the  pres- 
ent Waters  Pierce  Oil  company  into  Texas,  on  May  31, 
1900,  until  late  in  the  autumn  of  1907,  Mr.  Pierce  remained 
silent  under  attacks  of  a most  vindictive  and  unfair 
character.  There  is  no  doubt  that  this  campaign  of  abuse 
and  misrepresentation  manufactured  a public  sentiment 
which  has  been  reflected  in  jury  verdicts,  and  no  one 
will  dispute  that  politicians'  have  taken  unscrupulous  ad- 
vantage of  these  complications. 

In  the  following  open  letter  to  Governor  Campbell 
and  the  people  of  Texas,  Mr.  Pierce  opened  a campaign 
intended  to  set  the  facts  plainly  before  the  public,  and  it 
checked  for  a time  the  repetition  of  some  of  the  more 
vicious  falsehoods  against  Mr.  Pierce  and  his  company; 
OPEN  letter  to  gov.  CAMPBELL. 

Office  Waters  Pierce  Oil  Company. 

St.  Louis,  Mo.,  October  15,  1907. 

To  His  Excellency,  Thomas  M.  Campbell,  Governor,  and 
the  Public  of  Texas: 

Dear  Sir — Recently  I have  observed  in  the  news- 
papers statements  purporting  to  have  been  made  by  you 
in  public  speeches,  concerning  the  Waters  Pierce  Oil 
company  and  myself.  The  effect  of  these  statements 
is  certainly  injurious  to  both,  and  as  I think,  unjustly 
so.  I am  confident,  however,  that  the  views  which  you 
appear  to  entertain  are  founded  on  erroneous  knowledge 
of  the  facts,  and  I therefore  desire  to  correct  the  wrong 
impressions  which  you  entertain,  and  thus  enable  you 
to  form  a more  just  opinion.  Heretofore,  although  for 
several  years,  and  especially  during  the  past  year,  many 
violent  and  unjust  things  have  been  said  and  written 
about  the  Waters  Pierce  Oil  company,  I belieyed  that 
they  emanated  from  malicious,  irresponsible  or  ignorant 
persons,  and  that  the  most  dignified  course  for  me  to  pur- 
sue was  to  ignore  them.  Regarding  your  statements, 
however,  coming  as  they  do  from  such  an  exalted  source, 
they  are  destined  to  do  irreparable  damage  to  the  com- 
pany and  its  vast  interests. 

As  a consequence  of  legislation  enacted  by  Texas, 
together  with  an  aggressive  prosecution  initiated  and 
still  in  progress,  the  license  of  the  Waters  Pierce  Oil 
company  to  transact  business  in  Texas  has  been  can- 
celled, its  solvent  business  forced  into  a receivership, 
its  officers  menaced  with  imprisonment,  while  the  ban 
-of  political  excommunication  is  laid  on  those  who  dare 
make  a plea  for  calm  judgment  and  an  impartial  con- 
sideration of  the  company’s  side  of  the  controversy.  An 
•enormous  business  enterprise,  which  had  a troublous 
start  with  the  very  inception  of  the  oil  industry  in  the 
United  States,  which  progressed  slowly  in  a new  and 
sparsely  settled  territory,  and  which,  after  passing  many 
severe  crises  and  withstanding  powerful  competition, 
has  been  able  to  perfect  a system  for  the  economic  han- 
dling of  petroleum  and  its  products — this  great  business 
enterprise,  the  work  of  a lifetime  of  earnest  and  unre- 
mitting effort,  one  v/hich  gives  steady  employment  to 
thousands  of  men,  and  which  has  been  a prime  factor 
in  the  upbuilding  of  the  Southwest,  is  now  threatened 
with  complete  extinction,  and  its  property  with  confisca- 
tion. 

The  company  with  which  my  name  is  identified,  and 
whose  business  has  practically  been  under  rny  control 
for  more  than  a third  of  a century,  has  been  singled  out 
for  the  most  bitter  and  persistent  warfare  ever  waged 
against  a corporation.  The  animus  of  tne  attack  which 
has  been  made  against  the  Waters  Pierce  Oil  company 
is  found  in  the  generally  credited  charge  that  _ it  is  a 
trust,  a combination  in  restraint  of  trade;  in  brief,  that 
it  is  an  integral  part  of  the  Standard  Oil  company.  This 
I repeatedly  have  denied  and  again  deny. 


A studied  attempt  has  been  made  to  distort  and  mis- 
represent the  relations  which  have  existed  between  the 
Waters  Pierce  and  the  Standard  Oil  companies.  The 
whole  case  of  the  prosecuting  officials  of  Texas  rests 
on  the  allegation  that  the  Waters  Pierce  is  not  an  in- 
dependent company,  and  that  it  has  been  in  a conspiracy 
with  the  Standard  Oil  company  for  the  control  of  terri- 
tory and  prices.  The  legal  officials  of  Texas  and  its 
lower  courts  have  ruled  against  our  plea  of  independence. 
While  confident  that  the  higher  courts  will  affirm  the 
honesty  of  our  intent  and  the  validity  of  our  successive 
steps,  I yet  feel  that  it  is  just  and  proper  that  I should 
give  publicity  to  certain  facts  which  have  been  obscured 
in  the  struggle  of  our  company  to  continue  its  corporate 
existence.  It  is  pertinent  to  call  attention  to  the  man- 
ner in  which  the  Waters  Pierce  Oil  company  rose  to  a 
commanding  position  in  the  Southwest. 

The  business  which  the  Wafers  Pierce  Oil  company 
now  carries  on  was  started  and  well  developed  prior 
to  the  formation  of  the  Standard  Oil  company  or  any 
of  its  interests.  It  was  originated  by  John  Robert  Fin- 
lay, who  had  been  a manufacturer  of  shale  or  so-called 
“coal  oil”  in  Glasgow,  Scotland,  and  during  the  early 
fifties  came  to  this  country  and  located  in  St.  Louis, 
where  for  years  he  manufactured  oil  under  a Scottish 
process  from  a certain  kind  of  coal  then  found  in  Ken- 
tucky. Originally  the  firm  was  J.  R.  Finlay  & Com- 
pany, later  it  was  changed  to  the  St.  Louis  Coal  Oil  com- 
pany. ^ 

When  petroleum  was  first  discovered  in  this  coun- 
try Mr.  Finlay  became  a producer  of  it  in  what  is  now 
the  State  of  West  Virginia.  He  transported  his  own 
production,  and  also  oil  purchased  from  others,  in  wood- 
en barges  down  the  Little  Kanawha  River  to  Parkers- 
burg, thence  down  the  Ohio  to  Cairo,  and  up  the  IMis- 
sissippi  to  St.  Louis,  where  the  oil  was  drawn  by  hand 
pumps  from  the  barges  into  wooden  barrels,  which  were 
then  hauled  in  wagons  to  his  refinery  located  west  of 
the  city  limits  on  the  ground  now  occupied  by  the  Waters 
Pierce  Oil  company. 

YTars  before  any  company  had  obtained  a predomi- 
nating influence  in  the  petroleum  trade  I became  asso- 
ciated with  Mr.  Finlay  in  business  in  St.  Louis,  and  I 
recite  these  facts  to  correct  a popular  impression  that 
I was  initiated  into  the  oil  business  by  the  Standard  Oil 
company  and  have  since  been  its  representative  in  the 
Southwest. 

Competition  was  keen  in  those  days,  but  I set  ener- 
getically to  work  building  up  a trade  in  the  territory  trib- 
utary to  St.  Louis.  I was  first  in  the  field  and  had  an 
advantage  over  later  competitors,  and  I have  held  that 
advantage  despite  the  attempts  of  the  most  powerful  in- 
terests to  supplant  me.  It  was  not  then  considered  crim- 
inal to  push  out  into  new  fields  for  trade,  neither  w^ere 
there  any  laws  inhibiting  a merchant  from  making  ad- 
vantageous arrangements  with  individuals  or  companies. 
The  Southwest  was  not  then  the  prosperous  and  w'ell- 
settled  section  that  it  now  is;  the  methods  of  transpor- 
tation were  limited;  I was  constantly  menaced  by  com- 
petitors better  fortified  with  capital,  but  I worked  on  all 
unconscious  of  the  fact  that  my  efforts  were  rearing 
what  designing  politicians  and  graft  seekers  are  now  en- 
deavoring to  class  as  a criminal  trust. 

In  1869  I took  over  Mr.  Finlay’s  interest  and  operat- 
ed the  business  under  the  firm  name  of  H.  C.  Pierce  & 
Company.  Our  trade  increased  so  rapidly  that  I found 
it  impossible  to  handle  it  with  the  capital  in  hand,  and 
I therefore  took  Mr.  William  H.  Waters  into  partner- 
ship and  changed  the  firm  name  to  Waters,  Pierce  & 
Company.  Mr.  Waters  did  not  take  an  active  interest 
in  the  management  of  its  affairs,  the  burden  of  which 
I assumed,  and  in  the  long  years  which  followed  I gave 
it  my  entire  time.  I traveled  and  extended  the  busi- 
ness; designed  new  systems  of  transportation  and  handl- 
ing; was  the  first  to  introduce  tank  wagons  and  iron  bar- 
rels, and  invented  many  of  the  devices  now  in  general 
use.  I employed  the  methods  then  deemed  fair  to  hold 
and  extend  our  trade  and  strived  my  best  to  build  up  a 
permanent  enterprise  which  I could  hand  down  to  my 
children. 

By  the  year  1878  I had  built  up  an  extensive  trade 
in  Illinois,  Missouri,  Arkansas,  Indian  Territory,  Okla- 
homa, Louisiana,  Texas  and  the  Republic  of  Mexico,  and 


— 56 — 


had  won  a prestige  which  made  it  an  easy  matter  to 
enlist  the  required  additional  capital  to  care  for  the 
business.  I therefore  organized  a new  company  with  a 
capital  stock  of  $100,000,  of  which  Mr.  Waters  and  I 
took  forty  per  cent,  H.  A.  Hutchins  and  W.  P.  Thomp- 
son, of  Cleveland,  forty  per  cent,  and  Chess,  Carley  & 
Company,  of  Louisville,  twenty  per  cent.  It  was  under- 
stood by  all  parties  that  I should  retain  absolute  man- 
agement and  that  my  rights  to  direct  the  company’s 
affairs  should  not  be  questioned.  Some  years  after  the 
organization  of  the  company  Hutchins,  Thompson,  and 
Chess,  Carley  & Company  without  my  knowledge,  trans- 
ferred their  interests  to  the  Standard  Oil  company.  I pur- 
chased Mr.  Waters'  stock,  and  although  strongly  urged 
to  place  my  interests  in  the  original  Standard  Oil  Trust, 
I refused  to  do  so,  and  in  all  the  years  which  have ‘fol- 
lowed I have  controlled  the  affairs  of  the  Waters  Pierce 
Oil  company,  except  for  a brief  interval  when  illness 
forced  my  retirement  from  active  charge  of  its  affairs. 

There  was  then  no  law  and  no  public  sentiment 
against  having  business  relations  with  the  Standard  Oil 
company,  but  I preferred  to  perpetuate  the  name  and 
the  business  independence  of  the  concern  I had  aided  to 
grow  from  humble  beginnings,  and  I have  never  taken 
a step  aside  from  that  policy.  I am  not  now  and  never 
have  been  a stockholder  in  the  Standard  Oil  company 
or  had  any  oil  interest  other  than  the  Waters  Pierce  Oil 
company. 

The  interests  of  the  Standard  Oil  company  were 
represented  on  our  Board  of  Directors  by  members  who 
rarely  attended  its  meetings,  and  who  took  no  active 
part  in  the  affairs  of  the  company.  The  prosecuting 
officials  and  the  politicians  have  made  much  out  of  the 
admitted  fact  that  Standard  Oil  company  representa- 
tives audited  the  accounts  of  the  first  W’aters  Pierce  Oil 
company,  and  that  regular  reports  of  its  business  were 
sent  to  the  Standard  Oil  Company’s  New  York  office. 
It  would  have  been  a remarkable  state  of  affairs  if  such 
a well-managed  corporation  as  the  Standard  Oil  com- 
pany, owning  a majority  of  the  stock,  but  waiving*con- 
trol,  should  have  failed  to  apply  these  reasonable  busi- 
ness precautions.  I dictated  the  affairs  of  the  company 
and  conducted  it  strictly  as  an  independent  concern.  The 
company  is  not  a producer  or  refiner  of  oil  in  the  United 
States,  and  as  the  Standard  Oil  company  increased  its 
control  over  the  oil  trade  we  were  compelled  to  buy  more 
and  more  oil  from  it.  Even  had  the  Standard  not  owned 
one  share  of  our  stock,  our  inability  to  obtain  sufficient 
supplies  elsewhere  would  have  compelled  us  to  purchase 
the  bulk  of  our  oils  from  it. 

I wish  to  consider  more  in  detail  two  charges  which 
have  had  much  to  do  with  prejudicing  the  people  of 
Texas  against  the  Waters  Pierce  Oil  company.  The 
first  is  that  fraud  was  used  in  1900  in  securing  the  per- 
mit for  the  new  Waters  Pierce  Oil  company  to  transact 
business  in  Texas;  and  the  second  is  that  I committed 
false  swearing  in  signing  the  affidavit  stipulated  in  the 
Texas  anti-trust  law,  and  that  by  reason  of  such  false 
swearing  the  new  company  was  granted  a license. 

In  1900  one  of  our  Texas  agents  disregarded  his 
plain  instructions  and  made  an  exclusive  contract  which 
was  prohibited  by  the  laws  of  Texas.  This  transaction 
served  as  the  basis  of  a prosecution  which  deprived  our 
company  of  its  permit  to  do  business  in  that  State.  There 
was  political  animus  back  of  this  radical  action,  but  I 
shall  not  discuss  that  feature. 

The  Hon.  David  R.  Francis  gave  me  a letter  to  Sen- 
ator Bailey,  to  whom  I explained  our  troubles  in  his 
State.  He  said  that  Texas  would  not  tolerate  Standard 
Oil  company  methods,  and  I replied  by  assuring  him  that 
the  Waters  Pierce  Oil  company  was  an  independent  com- 
pany and  would  so  continue,  whereupon  he  agreed  to  take 
the  matter  up  with  the  State  officials,  observing  that  a 
legitimate  enterprise  should  not  be  deprived  of  its  right 
to  do  business  in  Texas.  He  made  an  honest  presenta- 
tion of  the  facts  to  Secretary  of  State  Hardy  and  Attor- 
ney General  Smith,  and  in  doing  so  was  actuated  by  a 
desire  to  grant  a favor  asked  of  him  by  Mr.  Francis,  and 
to  see  that  injustice  was  not  done  to  a company  which 
had  grown  up  with  Texas.  He  flatly  refused  to  accept  a 
retainer  or  any  pay  for  his  services,  and  has  never  re- 
ceived a dollar  from  me  or  from  the  Waters  Pierce  Oil 
company  for  any  legal  or  other  services  rendered  to  the 


company  in  connection  with  its  Te.xas  litigation  or 
otherwise.  He  has  since  been  my  attorney  in  other  im- 
portant matters,  and  for  his  high  legal  ability  I have  paid 
him  just  compensation. 

That  I was  in  abolute  control  of  the  old  Waters 
Pierce  Oil  company  is  evidenced  by  fne  recorded  fact 
that  I voted  every  share  of  stock  on  its  dissolution,  ap- 
praised its  assets,  bought  them  in  and  distributed  the 
proceeds  to  the  actual  owners  of  its  stock,  including,  of 
course,  payment  to  the  Standard  Oil  company  for  the 
proportion  held  by  it.  I subscribed  for  all  of  the  stock 
of  the  new  company,  paid  for  it  with  my  personal  check 
for  $400,000,  which  was  honored  at  the  bank  and  placed 
to  the  credit  of  the  new  company.  I transferred  one 
share  of  stock  to  each  of  the  four  gentlemen  I elected 
as  directors  of  the  new  company.  At  the  time  Texas 
licensed  the  new  company,  and  when  I signed  the  affida- 
vit, and  for  months  afterward,  I was  the  actual  owner 
of  the  4,000  shares  of  the  new  Waters  Pierce  Oil  com- 
pany. 

These  were  the  conditions  on  May  29,  1900,  on  the 
morning  of  which  day  the  Missouri  certificate  of  incorpo- 
ration for  the  new  company  came  into  my  possession. 

I had  received  word  that  the  Texas  authorities  were 
moving  for  the  appointment  of  a receiver.  I hastened 
to  Austin  on  a special  train,  arrived  there  May  31st, 
with  Mr.  J.  D.  Johnson,  my  attorney,  and  went  to  the 
State  House. 

When  the  Attorney  General,  Hon.  Thomas  S.  Smith, 
found  that  I had  incorporated  the  new  company  under 
the  same  name  in  Missouri,  he  bluntly  declared  that 
if  there  was  any  law  under  which  he  could  prevent  the 
admission  of  the  company  into  Texas,  he  would  avail 
himself  of  it.  I urged  him  to  examine  the  law,  and  for 
hours  he  and  his  assistants  did  so.  After  a thorougn 
examination.  Attorney  General  Smith  reluctantly  in- 
formed Secretary  of  State  Hardy  that  there  was  no  al- 
ternative save  to  grant  the  permit,  and  that  official  did 
so. 

This  strict  adherence  to  the  forms  prescribed  by 
the  law  has  been  characterized  by  those  who  have  at- 
tempted to  take  political  advantage  of  the  prosecution 
of  the  Waters  Pierce  Oil  company  as  a “cunningly  con- 
ceived fraud,”  “atrocious  deception  and  criminal  sharp 
practice,”  and  other  epithets  in  direct  variance  with  the 
plain  facts. 

It  should  be  kept  in  mind  that  Texas  licensed  the 
new  Waters  Pierce  Oil  company  on  May  31,  1900,  two 
days  after  it  had  been  chartered  in  Missouri,  and  that 
during  those  two  days  it  had  not  transacted  any  busi- 
ness in  Texas,  neither  had  it  purchased  any  supplies  nor 
entered  into  any  arrangement  of  any  kind. 

The.  anti-trust  law  in  Texas  in  operation  at  that  time 
required  that  an  officer  of  a company  should  make,  at 
stated  intervals,  an  affidavit  certifying  that  it  was  “not 
a member  of  or  a party  to  any  pool,  trust,  agreement, 
combination,  confederation  or  understanding  with  any 
other  corporation,  partnership,  individual,  or  any  other 
person  or  association  of  persons,  to  regulate  or  fix  the 
price  of  any  article  or  manufacture,  mechanism,  com- 
modity, convenience,  repair,  any  product  of  mining,  or  of 
any  article  or  thing  whatsoever.” 

Governor  Sayers  of  Texas,  and  other  State  officials 
who  were  present,  congratulated  me  on  the  granting  of 
a permit  to  the  new  company,  and  as  I turned  to  leave 
the  office,  one  of  Secretary  Hardy’s  assistants  spoke 
about  the  affidavit,  and  suggested  that  I sign  it.  A 
printed  blank  form,  such  as  was  in  general  use,  was 
produced.  I submitted  this  regular  printed  form  to  my 
attorneys,  Hon.  George  Clark,  of  Waco,  Texas,  and 
J.  D.  Johnson,  Esq.,  of  St.  Louis,  Mo.,  who  informed 
me  that  I could  truthfully  sign  it,  and,  following  their 
advice,  I did  so.  The  people  of  Texas  have  maliciously 
been  led  to  believe  that  this  affidavit  was  specially  pre- 
pared for  the  occasion. 

Now,  more  than  six  years  afterwards,  I have  been 
indicted  for  false  swearing  in  making  this  affidavit,  and 
much  of  the  adverse  sentiment  in  Texas  against  myself 
and  the  Waters  Pierce  Oil  company  has  arisen  from 
the  fact  that  I resisted  extradition  and  imprisonment  on 
this  utterly  false  and  senseless  charge.  It  has  been 
stated  over  and  over  again  on  the  stump  and  in  the  press 
that  the  company  was  reinstated  only  because  I swore 


that  it  was  not  a part  of  the  Standard  Oil  company, 
and  a large  number  of  the  people  of  Texas  have  been 
deluded  into  an  acceptance  of  this  falsehood.  Signing 
this  affidavit  was  not  an  imposed  condition  for  the  grant- 
ing of  a permit  for  the  new  company.  The  officially 
recorded  fact  is  that  the  company  was  admitted  to  do 
business  in  Texas  before  I made  the  affidavit,  which, 
although  required  by  law,  need  not  have  been  signed 
prior  to  the  first  of  July  following,  and  was  not  in  any 
wise  a condition  or  requisite  to  obtaining  the  permit 
to  do  business. 

I do  not  quibble  over  the  fact  that  the  Waters 
Pierce  Oil  company  mentioned  in  the  affidavit  was  an 
infant  two  days  old — I waive  that,  and  declare  that  I 
could  truthfully  have  signed  it  at  any  time  thereafter, 
and  if  it  were  now  required  by  law,  would  unhesitatingly 
sign  it  today. 

At  the  present  time  the  affairs  of  the  company  in 
Texas  are  in  a most  hazardous  position.  A very  heavy 
fine  has  been  imposed  upon  it,  its  right  to  continue  its 
business  is  challenged,  and  the  State  authorities  are  en- 
deavoring through  receivership  to  take  possession  of  all 
of  the  property  and  business  in  the  State.  These  mat- 
ters are  now  pending  before  the  State  courts.  In  the 
meantime  a law  has  gone  into  effect  in  Texas  which,  un- 
der the  circumstances  above  mentioned,  would  have  ren- 
dered it  dangerous  not  only  for  the  company,  but  for 
any  of  its  employes,  to  carry  on  the  business  in  Texas. 
It  was  necessary  for  the  protection,  not  only  of  the 
business  and  property,  but  also  of  the  many  hundred  em- 
ployes, all  residents  and  citizens  of  the  State  of  Texas, 
who  are  surely  guiltless  of  any  wrongful  conduct,  to  in- 
voke the  aid  of  the  Federal  court.  Accordingly  that  court 
has  appointed  a receiver  and  is  preserving  the  rights  and 
interests  of  all  concerned,  however  they  may  eventually 
be  decided.  For  fny  part  I am  very  deeply  chagrined 
that  such  calamities,  which  I regard  as  wholly  unde- 
served, should  have  fallen  upon  the  company  and  busi- 
ness which  I have  given  so  many' years  and  so  much  hard 
labor  to  develop,  and  that  the  people  of  Texas  should 
appear  to  be  so  prejudiced  against  me. 

My  long  experience  in  the  State,  however,  convinces 
me  beyond  any  doubt  whatever  that  the  people  of  Texas 
are  just  and  fair,  and  I therefore  look  forward  with  con- 
fidence to  the  time  when  I shall  be  able  to  resume  the 
peaceful  control  of  my  business  in  Texas  in  a fair  and 
open  manner.  I am  guilty  of  no  wrong  thinking  or  doing 
against  the  people  of  Texas.  On  the  contrary,  they  are 
my  friends,  and  I have  faithfully  served  their  interests 
for  a great  number  of  years'.  The  operations  and  or- 
ganizations of  my  company  are  so  large  that  they  ex- 
tend throughout  the  State,  and  supply  the  daily  needs 
of  a very  large  proportion  of  your  people.  'We  have 
never  had  any  differences  with  our  customers,  nor  they 
with  us,  and  all  we  now  desire  is  to  be  allowed  to  con- 
tinue to  supply  them  as  heretofore  with  one  of  the  ne- 
cessities of  life.  I wish  neither  favor  nor  advantage, 
neither  do  I desire  to  do  other  than  respect  your  laws. 

I have  faith  that  a day  is  at  hand  when  the  calm 
judgment  of  Texas  will  assert  itself,  and  when  the  facts 
in  this  case  will  have  their  proper  weight  against  an  or- 
ganized effort  to  destroy  a great  enterprise  which  has 
developed  with  the  splendid  upbuilding  of  the  territory 
in  which  it  was  a pioneer,  and  in  which  it  asks  only  the 
right  to  pursue  its  busines  under  strict  compliance  with 
the  law. 

As  these  matters  are  of  great  interest  to  the  public 
of  Texas  and  as  I am  interested  in  having  them  under- 
stand my  position  and  views  I have  addressed  this  letter 
to  the  public  as  well  as  to  yourself,  and  have  sent 
copies  to  the  press. 

Yours  respectfully, 

HENRY  CEAY  PIERCE. 


THE  MISTAKES  OF  MISS  IDA  M.  TARBELL. 

No  better  illustration  can  be  given  of  the  wide- 
spread effect  of  the  crusade  of  misrepresentation  against 
Henry  Clay  Pierce  and  his  company,  than  that  con- 
tained in  a magazine  article  written  by  Miss  Ida  M. 
Tarbell,  and  published  in  February,  1907. 


This  noted  and  gifted  writer  was  led  to  make  a num- 
ber of  unjust  and  absolutely  unfounded  charges  against 
Mr.  Pierce,  the  'Waters  Pierce  Oil  company  and  also 
against  Senator  Joseph  W.  Bailey.  Her  fame  as  a 
writer,  joined  with  the  merited  repute  of  the  American 
Magazine,  gave  these  charges  a wide  circulation  and  pre- 
sumably general  acceptance.  Beyond  doubt  Miss  Tar- 
bell had  no  motive  other  than  to  present  the  truth  as 
she  understood  it,  and  she  is  to  blame  only  because  of 
carelessness  in  accepting  the  accuracy  of  statements  in- 
vented and  circulated  by  unscrupulous  political  con- 
spirators and  trade  rivals  of  Mr.  Pierce.  Her  unfounded 
attack  strikingly  illustrates  the  success  which  has  been 
attained  by  those  who  have  sought  to  malign  the  men 
and  interests  mentioned  in  her  article.  These  political 
plotters  managed  to  deceive  Miss  Tarbell;  no  wonder 
that  many  of  the  people  of  Texas  have  been  led  to  have 
faith  in  their  cunningly  linked  falsehoods. 

The  series  of  articles,  from  which  the  preceding 
chapters  were  compiled,  was  then  running  through  the 
leading  papers  of  Texas.  In  justice  to  Mr.  Pierce  and 
Senator  Bailey,  and  in  justice  to  those  who  had  begun 
to  resent  the  vilification  to  which  these  gentlemen  had 
been  subjected,  I wrote  the  following  reply  to  the  state- 
ments made  by  Miss  Tarbell,  and  the  press  of  Texas  gave 
it  wide  circulation.  Miss  Tarbell  has  not  and  cannot  re- 
fute my  deductions,  nor  can  she  or  any  other  person 
challenge  the  facts  as  herein  set  forth: 

AN  OPEN  LETTER  FROM  MR.  ADAMS  TO  THE  PRESS 
IN  ANSWER  TO  STATEMENTS  MADE  IN  A MAOA- 
ZINE  ARTICLE  BY  MISS  IDA  M.  TARBELL. 

To  the  Editor:  Miss  Ida  M.  Tarbell,  in  the  Febru-  , 

ary  number  of  the  American  Magazine,  makes  a most 
remarkable  and  lamentable  contribution  to  the  Waters 
Pierce  Oil  company  controversy,  and  makes  an  equally  * 
strange  attack  on  Senator  Joseph  W.  Bailey.  I yield  re-  ' 
spect  to  the  conventional  rule  which  decrees  that  the 
veracity  of  a lady  should  not  be  questioned,  but  Miss 
Tarbell  has  assumed  the  task  and  responsibilities  of  a 
man,  and  I happen  to  know  that  she  does  not  ask  or 
desire  immunity  from  criticism  on  account  of  her  sex. 

I preface  by  paying  anew  my  tribute  to  Miss  Tarbell  C 
for  her  splendid  career  as  a historian.  No  woman  in  our 
times  has  rivaled  her  fame  in  her  chosen  field  of  reform, 
Her  “History  of  the  Standard  Oil  Company”  was  epoch-  '< 
making  in  its  results.  It  was  a stupendous  task  ably  ..j 
and  conscientiously  performed,  and  the  record  of  the 
great  oil  trust,  as  she  gives  it,  is  singularly  free  from  er-  ., 
rors,  considering  the  conflicting  evidence  and  the  difficulty  S 
of  arriving  at  the  precise  truth. 

When,  therefore,  I read  her  direct  statements  con- 
cerning the  Waters  Pierce  Oil  company  and  Senator 
Bailey,  as  they  appear  in  the  February  issue  of  the  Ameri-  ' 
can  Magazine,  my  wonder  at  their  absolute  falsity  is  min-  ' 
gled  with  surprise  and  sorrow  that  this  brilliant  wo-.: 
man  should  have  lent  her  name  to  the  circulation  of  ‘ 
charges  invented  by  unscrupulous  politicians  and  emis- . 
saries  of  the  Standard  Oil  company.  The  intelligent  peo-  ^ 
pie  of  Texas  are  inured  to  these  stale  untruths  and  thor- 
oughly understood  the  motives  of  these  local  partisans 
and  plotters  who  utter  them,  but  it  comes  as  a shock 
when  an  author  of  Miss  Tarbell’s  fame  and  standing  prints 
such  matter  as  I am  now  compelled  absolutely  to  refute 
by  unimpeachable  proof. 

Space  does  not  permit  a consideration  of  Miss  Tar- 
bell’s  lesser  mistakes,  and  I shall  confine  myself  to  the 


more  glaring  and  inexcusable  ones.  The  Waters  Pierce 
case  covers  so  many  years  and  is  so  complicated  with 
lawsuits  and  events  that  slight  errors  are  almost  inevit- 
able. In  the  history  of  it,  which  I am  now  writing,  I 
plead  guilty  to  an  error  which  slightly  reflected  on  the 
company,  but  it  was  not  vital,  and  it  pertained  to  an  in- 
cident much  obscured  in  legal  technicalities. 

>0  EXCUSE  FOR  MISTAKES. 

Xot  so  with  Miss  Tarbell’s  article.  The  facts  were 
staring  her  in  the  face;  they  appeared  in  numerous  court 
records  easily  obtained;  there  was  and  is  no  honest  con- 
troversy concerning  the  basic  truths;  but  instead  of 
searching  for  these  facts  Miss  Tarbell  permitted  herself 
to  be  deluded  by  the  vicious  lies  uttered  by  unprincipled 
demagogues  and  printed  in  the  daily  papers.  The  press 
is  an  excellent  institution,  but  Miss  Tarbell  should 
know  better  than  to  impeach  a man  or  even  a corpora- 
tion on  the  testimony  of  its  news  columns.  I am  sure 
that  she  did  not  prepare  her  wonderful  history  of  the 
Standard  Oil  company  from  newspaper  files  exclusively. 

I shall  now  treat  certain  of  her  statements  just  pub- 
lished with  all  the  mercy  they  deserve.  I can  not  under- 
stand why  the  Waters  Pierce  Oil  company  is  singled 
out  for  the  most  malicious  and  persistent  campaign  of 
misrepresentation  ever  directed  against  an  institution  in 
the  United  States.  I blame  Miss  Tarbell  only  for  per- 
mitting herself  to  be  deceived,  but  I give  notice  to  all 
male  liars  in  Texas  that  their  work  will  be  mighty  difficult 
after  this  datd.  I am  telling  Texas  the  truth,  and  Tex- 
ans will  believe  it. 

Writing  of  the  earlj--  legal  troubles  of  the  Waters 
Pierce  Oil  company.  Miss  Tarbell  says: 

“Everybody  declared  the  offending  concern  to  be 
guilty  of  all  these  points,  but  nobody  could  prove  satis- 
factorily its  guilt  on  any  one  of  them  until  finally  an 
agent  was  caught  flagrante  delicto  making  an  exclusive 
contract  with  a dealer.  He  was  clapped  into  prison,  the 
Waters  Pierce  Oil  company  was  arraigned  and  a long, 
bitter  and  sensational  suit  followed.” 

Xothing  of  the  kind  ever  happened.  The  “exclusive 
contract”  was  made  by  the  Galveston  agent  of  the  com- 
pany with  certain  dealers  in  Brownsville.  He  was  not 
imprisoned.  The  only  man  ever  “clapped  into  prison” 
was  E.  T.  Hathaway,  who  operated  500  miles  from 
Brownsville,  and  who  .was  tried  two  years  prior  to  this 
on  an  entirely  different  case,  was  convicted  for  an  entirely 
different  offense,  who  went  to  jail  of  his  own  free  will 
to  test  a technicality,  and  who  was  later  acquitted  and  re- 
leased. 

A CRIMINAL  CHARGE. 

Miss  Tarbell  continues: 

“The  case  was  carried  from  court  to  court,  the  State 
always  winning,  until  finally  the  United  States  Supreme 
Court  in  March,  1900,  sustained  the  decision,  and  the 
Waters  Pierce  company  was  ordered  to  close  up  its  bus- 
iness and  get  out  of  Texas.  At  this  point  it  found  a 
friend  in  Senator  (then  congressman)  Bailey,  who  for 
the  sum  of  $3300  (charged  on  the  company’s  books 
to  profit  and  loss)  besought  the  attorney  general  not  to 
turn  his  client  out  of  the  State,  but  to  permit  it  to 
continue  business  on  promise  of  good  behavior.” 

It  would  be  difficult  to  condense  more  of  untruth 
into  one  short  sentence.  Mr.  Bailey  did  see  Attorney 
General  Smith  and  Secretary  of  State  Hardy  in  the  in- 
terest of  Mr.  H.  C.  Pierce  and  his  company.  He  was  told 
by  these  gentlemen  that  under  the  ruling  of  the  Supreme 
Court  of  the  United  States  it  was  absolutely  impossible 
to  reinstate  the  ousted  company.  Possibly  Mr.  Bailey 


committed  a “crime”  by  suggesting  that  the  company  dis- 
solve, reorganize  and  then  apply  for  a permit,  but  this 
obvious  expedient  was  already  under  consideration  by 
Mr.  Pierce  and  his  lawyers.  After  this  fruitless  con- 
ference Mr.  Bailey  left  for  Washington.  He  had  noth- 
ing to  do  with  the  dissolution  of  the  old  Waters  Pierce 
Oil  company,  was  not  consulted,  was  not  in  Austin  when 
the  new  company  was  granted  a permit,  and  knew  noth- 
ing about  it  until  some  time  after  the  whole  matter  was 
settled. 

The  direct  charge  that  Mr.  Bailey,  “who  for  the  sum 
of  $3300  (charged  on  the  company’s  books  to  profit  and 
loss)  besought  the  attorney  general  not  to  turn  his  client 
out  of  the  State,  etc.,”  is  one  which  is  rather  dangerous 
to  make  unless  it  can  be  proved  by  Miss  Tarbell.  The 
most  reckless  and  vindictive  ^3f  Senator  Bailey’s  ene- 
mies in  Texas  do  not  dare  whisper  such  a charge.  The 
feeling  against  Senator  Bailey  is  based  on  the  fact  that 
he  borrowed  $3300  from  Mr.  Pierce  at  the  time  of  their 
first  interview.  The  proof  that  this  was  a loan,  and  not  a 
fee  or  a bribe,  is  absolute.  It  does  not  rest  on  the  word 
of  Mr.  Bailey  or  that  of  Mr.  Pierce,  but  on  the  fact  that 
Mr.  Bailey  gave  Mr.  Pierce  his  demand  note  for  the 
amount.  A lawyer  does  not  give  a demand  promissory 
note  for  a legal  fee,  and  a scoundrel  does  not  transfer 
such  sort  of  paper  in  return  for  a bribe.  There  is  the  ad- 
ditional fact  that  Senator  Bailey  paid  this  money  back  to 
Mr.  Pierce,  along  with  other  sums  borrowed  at  different 
times.  It  is  deplorable  that  Miss  Tarbell  should  make 
such  a serious  charge  in  the  face  of  verified  facts  to  the 
contrary. 

AX  AMUSING  BLUNDER. 

The  next  sentence  in  this  paragraph  by  Miss  Tarbell 
is  almost  amusing  in  its  inaccuracy,  when  she  declares 
that  “the  best  that  Mr.  Bailey  could  do  for  his  client 
was  to  secure  it  two  months’  time,  until  June,  in  which 
to  wind  up  its  affairs.”  If  all  history  is  based  on  a 
similar  degree  of  truth,  it  is  likely  that  Benedict  Arnold 
and  not  George  Washington  was  our  greatest  National 
character. 

Mr.  Bailey  met  Mr.  Pierce  for  the  first  time  in  his 
life  on  April  25,  1900.  His  conference  with  the  State 
officials  of  Texas  was  on  April  30.  The  permit  of  the 
Waters  Pierce  Oil  company  to  do  business  in  Texas 
expired  on  June  6,  1899,  and  Attorney  General  Smith,  of 
his  own  volition,  and  in  response  to  the  general  senti- 
ment then  existing  in  Texas,  consented  to  allow  the  com- 
pany to  continue  in  business  until  the  Supreme  Court  of 
the  United  States  handed  down  its  decision.  This  decision 
was  made  public  on  March  19,  and  immediately  afterward, 
and  weeks  before  Mr.  Pierce  ever  met  Mr.  Bailey,  the  at- 
torney general  gave  the  company  until  May  15  in  which 
to  adjust  its  affairs.  Later,  in  response  to  official  corres- 
pondence with  Mr.  J.  D.  Johnson,  the  leading  counsel 
of  the  company,  the  attorney  general  extended  the  time 
for  sixteen  days,  or  until  May  31. 

That’s  the  truth,  and  it  is  all  spread  on  public  docu- 
ments. Mr.  Bailey  had  no  more  to  do  with  these  details 
than  had  Miss  Tarbell.  It  passes  my  comprehension 
why  such  things  are  written. 

Perhaps  the  most  astounding  of  Miss  Tarbell’s  histor- 
ical contributions  to  this  case  is  contained  in  this  para- 
graph: 

“On  May  31  an  injunction  was  issued  in  Austin,  Tex- 
as, against  Mr.  Pierce,  forbidding  him  from  ever  doing 
business  in  Texas.  An  hour  after  this  injunction  was  is- 


—59— 


sued  Mr.  Pierce  filed  an  application  for  a charter  for  a 
Jiew  company  of  the  same  name  as  the  old,  the  Waters 
Pierce  company.  In  making  his  application  Mr.  Pierce 
made  affidavit  that  the  concern  was  in  no  way  connected 
•with  the  Standard  Oil  company.  He  stated  that  he 
owned  3996  shares  of  the  new  company  (the  total  issue 
was  4000).  The  charter  was  granted,  thanks  largely  to 
Senator  Bailey’s  efforts,  and  the  next  morning  the  new 
Waters  Pierce  Oil  company  was  delivering  oil. 

The  last  twelve  words  contain  all  of  the  truth  in  that 
astounding  paragraph.  Perhaps  some  Austin  judge  is- 
sued an  injunction  on  May  31  forbidding  Mr.  Pierce 
from  ever  doing  business  in  Texas,  but  there  is  no 
record  of  it.  We  have  so  many  and  so  wonderful  in- 
junctions these  days  that  I am.  prepared  to  hear  of  any 
form  of  judicial  mandate,  but  this  one  has  escaped  en- 
tirely my  notice.  What  had  Mr.  Pierce  done  to  call 
•down  on  himself  the  wrath  of  a court?  He  was  not 
a corporation.  He  was  not  a trust.  He  was  not  a con- 
spiracy in  restraint  of  trade.  The  laws  of  Texas  are 
strict  enough  for  all  practical  purposes,  but  they  do  state 
that  it  takes  two  or  more  persons  or  companies  to  con- 
stitute a trust  or  a conspiracy  or  any  other  dreadful 
thing.  But  perhaps  some  judge  levelled  this  blow  at 
Mr.  Pierce.  Certainly  that  gentleman  never  found  it  out, 
and  I have  searched  in  vain  for  any  record  of  that 
unprecedented  injunction. 

A CARELESS  HISTORIAN. 

Mr.  Pierce  did  not  file  an  “application  for  a char- 
ter” for  the  new  company.  He  filed  an  application  for 
a permit  to  do  business  in  Texas.  The  charter  had  al- 
ready been  granted  in  Missouri.  The  name  of  the  old 
as  well  as  the  new  concern  was  not  the  “Waters-Pierce 
company,”  but  it  was  “The  Waters  Pierce  Oil  company,” 
and  it  is  not  well  for  a historian  to  be  that  careless.  That 
error,  however,  is  of  slight  importance  compared  with 
the  flaring  and  inexcusable  one  which  follows  it.  Read 
again  the  assertion  to  which  Miss  Tarbell  gives  the 
weight  of  her  name  and  fame: 

“In  making  his  application  Mr.  Pierce  made  affidavit 
that  the  concern  was  in  no  way  connected  with  the 
Standard  Oil  company.” 

He  never  did  anything  of  the  kind.  This  falsehood 
has  been  repeated  a thousand  times  with  an  infinite  num- 
ber of  variations,  and  in  absolute  disregard  of  the  offic- 
ially recorded  fact  that  Mr.  Pierce  signed  only  the  blank 
form  of  affidavit  provided  for  in  the  Texas  anti-trust  law 
then  in  force.  There  was  not  the  slightest  mention  of 
the  Standard  Oil  trust,  or  of  any  other  trust.  Instead 
of  searching  for  the  fact — which  is  recorded  in  Austin  and 
printed  again  and  again  in  the  legal  records  of  the  vari- 


ous cases  against  the  corporation — Miss  Tarbell  accepted 
the  veracity  of  some  blatant  demagogue,  and  gave  it  the 
sanction  of  her  name  and  the  authority  and  circulation  of 
the  American  Magazine.  She  then  continues: 

“He  (Mr.  Pierce)  then  stated  that  he  owned  3996 
shares  of  the  new  company  (the  total  issue  was  4000.)” 
Mr.  Pierce  stated  nothing  of  the  kind.  The  affidavit 
did  not  call  for  any  statement  of  the  amount  of  his  hold- 
ings. He  could  not  have  stated  them  had  he  desired  to 
do  so.  In  the  second  place,  he  then  owned  4000  shares, 
according  to  his  later  testimony,  and  according  to  the 
plain  evidence  of  the  stock  books  of  the  new  Waters 
Pierce  Oil  company.  We  will  proceed  to  Miss  Tarbell’s 
next  sentence: 

“The  charter  was  granted,  thanks  largely  to  Senator 
Bailey’s  efforts.” 


THE  OFFICIAL  RECORD. 

The  permit  was  granted  to  the  new  company  by  rea- 
son of  the  fact  that  the  officials  of  Texas,  under  the  law, 
were  compelled  to  recognize  the  validity  of  the  dissolu- 
tion of  the  old  company  in  Missouri,  also  the  validity  and  | 
regularity  of  the  incorporation  of  the  new  Waters  Pierce  | 
Oil  company.  I shall  not  enter  into  any  discussion  of  j 
this  matter  for  the  reason  that  it  is  not  a debatable  mat- 
ter. Miss  Tarbell  is  absolutely  in  error.  The  official 
records  of  both  Missouri  and  Texas  flatly  contradict  her. 
Senator  Bailey  took  no  part  in  the  negotidtions,  was  not  j 
consulted  in  the  drawing  up  of  the  papers,  was  in  ignor-  : 
ance  of  the  specific  law  which  made  the  dissolution  and  , 
the  new  incorporation  possible,  was  in  Washington  when  | 
all  these  things  happened  and  knew  nothing  about  them  > 
until  the  session  of  congress  was  ended. 

I have  huge  scrap  books  filled  with  similar  misstate-  ' ij 
ments,  but  I am  not  penning  a history  of  the  Waters  ‘jb 
Pierce  Oil  company  from  the  political  speeches  of  the  5 
men  who  are  trying  to  climb  into  office  through  the  villi-  I 
fication  of  that  corporation.  Miss  Tarbell  is  safe  from 
the  suspicion  that  she  penned  these  lines  in  the  interest 
of  the  recently  formed  allies  of  the  Standard  Oil  com-  :[ 
pany,  but  she  has  unwittingly  lent  her  name  and  influ- 
ence  to  the  harming  of  the  one  large  oil  company  in  V' 
the  United  States  which  has  preserved  its  identity  against 
the  great  Rockefeller  combine,  and  she  has  maligned  the 
one  man  who  for  a generation  has  stood  like  a rock()lJ 
and  refused  to  bend  the  knee  to  the  magnates  who  have,’'.'Jj 
conspired,  and  still  are  conspiring,  in  the  secret  confer-fjH 
ence  rooms  at  26  Broadway.  jj 

FREDERICK  UPHAM  ADAMS.  ;t||l 
Houston,  Jan.  29,  1908. 


INDEX 


Affidavit— 

As  Signed  by  H.  C.  Pierce 

Falsehoods  Concerning  it 

Andrews,  Samuel- 

Started  Rockfeller  in  Business 

Anthony,  Robert  A. — 

Examination  of  H.  C.  Pierce 

Archbold,  John  D. — 

Signed  Standard  Oil  Agreement 

Indicted  in  Texas 

Father-in-law  of  M.  M.  Van  Buren.. 

Austin,  F.  A — 

Indictment  Against 

Bailey,  Senator  Joseph  W.— 

Campaign  of  Falsehood  Against 

Alleged  Influence  for  Waters  Pierce. 

Refuses  Fee  from  Mr.  Pierce 

Not  in  Austin  with  Mr.  Pierce 

Candidate  for  U.  S.  Senatorship 

First  Investigation  of 

His  Vindication  by  Legislature 

His  Introduction  to  Mr.  Pierce 

Mistaken  Criticism  by  Miss  Tarbell. 

Bellamy,  Edward — 


Brooks,  Judge  R.  E. — 

Tries  Ouster  Case  of  1897 

His  Charge  to  the  Jury 

Ruling  on  Brownsville  Rebates. 
HisJInstruction  to  Jury  in  1897. 

Brooks,  Judge  Y.  L. — 

His  Charge  to  Jury  in  1907 

Bryan,  AVilliam  J. — 


Campbell,  Governor  T.  M. — 

Open  Letter  to  from  H.  C.  Pierce. 

Carley,  Francis  I). — 

Director  in  Waters  Pierce 

Cassatt,  A.  J. — 

Humbled  by  Rockefeller 

Chess,  Carley  k Company— 

A Masquerading  Independent 

Defeated  by  H.  C.  Pierce 


Page 

...39 

.38-39 

...10 

...46 

...16 

...22 

...48 

...24 

...  4 
...  6 
...31 
...37 


...40 

...41 

...57 

...59 

...  3 

...24 

25-26 

...27 

...51 

...51 

...  4 


.39-56 


16 


Clark,  George — 

In  Austin  with  H.  C.  Pierce 

Pierce  Affidavit  Submitted  to  him 

Crane,  M.  M. — 

Attorney  General  of  Texas 

Davidson,  Attorney  General  R.  31.— 

His  Classification  of  J.  P.  Gruet ... 

Brings  Suit  Against  Waters  Pierce 

Drake,  E.  L. — 

Discovers  First  Oil  Well 

Eagle  Refining  Company — 

Bought  by  Waters  Pierce 

Its  Sale  Declared  Legal 

Elgin  Watch  Company — 


Field,  Marshall — 

Compared  to  Waters  Pierce 

Enormous  Business  and  Profits 

Finlay,  A.  M. — 

His  Instructions  to  Agents 

Becomes  President  of  Waters  Pierce. 
Lacked  Required  Aggression 

Finlay,  John  Robert — 

Oil  Pioneer 

When  Rockefeller  was  a Boy 

Sketch  of  Career 

Fish,  Stuyvesant — 

His  Fight  with  Harriman.. 

Flagler,  H.  M.- 

Party  to  Standard  Oil  Agreement 

Indicted  in  Texas 

Francis,  Gov.  David  R. — 

Gives  Letter  to  Bailey 

Fries,  Lewis — 

Indictment  Against 


13  George,  Henry — 


14  Grice,  3Villiam — 

14  Indictment  Against. 

-61- 


Page 

..37 

..57 


.24 


.42 

.49 

.10 

.24 

.25 


.19 

.18 

.19 

.26 


.43 

.48 


5 

.10 

.56 


.16 

.16 

.22 

.57 


.24 


3 


.24 


IN  DEX — Continued 


Gniet,  John  P.— 

Signs  Affidavit 38 

With  Standard  Oil  in  1886 42 

Employed  by  Waters  Pierce  in  1890 42 

Refuses  to  Testify  Against  Standard  Oil 42 

Receives  Special  Salary  from  Mr.  Pierce 43 

His  Unfortunate  Habits 43 

Discharged  by  Tinsley 43 

Demands  Money  from  Mr.  Pierce 43 

He  Sells  Documents  to  Prosecution 44  ■ 

Makes  Contract  with  Lightfoot ^ 44 

Evasive  Answer  to  Interrogatory 45 

Gruet,  J.  P.  Jr. — 

Tenders  Resignation  to  Mr.  Pierce 43 

Hadley,  Herbert  S. — 

Failed  to  Use  Gruet  as  Witness 45 

Brings  Suit  Against  Waters  Pierce 46, 

Hardy,  1).  H.— 

Asks  Attorney  General  Smith  for  Opinion 32 

Grants  Permit  to  new  Waters  Pierce 39 

Harrimaii,  E.  J. — 

His  Fight  with  Stuyvesant  Fish 16 

Hathaway,  E.  T.— 

Indicted  in  McLennan  County 22 

Imprisoned  and  Later  Acquitted 22 

Miss  Tarbell’s  Error  Concerning  him 59 

Henry  k Strihliug^ — 

In  Waco  Suit  of  1895 23 

Commissions  at  Stake ^ 24 

Hutchins,  H.  A. — 

Sells  Stock  to  Standard  Oil  Trust 14 

Party  to  Standard  Oil  Agreement 16 

Director  in  Waters  Pierce 16 

Johnson,  J.  D. — 

His  Correspondence  with  Tom  Smith .30 

Goes  to  Austin  with  H.  C.  Pierce 37 

Mr.  Pierce  Refers  Question  to  him 47 

'His  Conference  with  Standard  Oil  Attorney 47 

Pierce  Affidavit  Referred  to  him 57 

Keenan,  J.  W. — 

Indictment  Against 24 

Kier,  Samuel  M. — 

“Kier’s  Rock  Oil” 10 

Lewis,  J.  L. — 


-__.25 

Lesueur,  A.  A.— 


Secretary  of  State  of  Missouri 30 

His  Letter  to  Tom  Smith 32 

Lightfoot,  Jewel  P, — 

His  False  Statement  to  Texas  Legislature 44 

His  Contract  with  J.  P.  Gruet 45 

Lloyd,  Henry  D. — 

3 

Lockhart,  Charles — 


McFall,  D.  A.—  p, 

Introduces  Bailey  Investigating  Resolution 

Payne,  0.  H.— 

Party  to  Standard  Oil  Agreement 

Pickle,  D.  J.— 

Pierce,  Clay  Arthur — 

Becomes  President  of  Waters  Pierce 43- 

Pierce,  Henry  Clay — 

Insures  Supremacy  of  Waters  Pierce 

Boyhood  of 

Moves  to  St.  Louis 

Invades  Southwest 

Introduces  Oil  in  Texas 

His  Marriage 

Conquest  of  Mexico 

Becomes  an  Inventor , 

Did  Not  Sign  Standard  Oil  Agreement 

Indicted  in  McLennan  County 

Attempt  to  Settle  Penalty  Suit 

False  Charges  Against 

Obtains  Full  Control  of  Waters  Pierce , 

Votes  all  Stock  for  Dissolution 

Protests  Against  Transfer  to  Standard 

Refuses  to  Sell  Stock  to  Standard . 

Conference  with  Standard  Oil  Company : 

In  -Absolute  Control  of  new  Waters  Pierce i 

Signing  of  the  Famous  Affidavit i 

He  Employs  J.  P.  Gruet ■ 

He  Pays  Gruet  Special  Salary < 

His  Large  Interests  and  Investments i 

Refuses  to  be  Blackmailed  by  Gruet i 

Testifies  Before  Commissioner  Anthony < 

Suffers  from  Ill-health ‘ 

Describes  Acts  of  Tinsley 

Willing  to  Risk  Imprisonment f 

Letter  to  Governor  Sayers I 

Letter  to  Governor  Campbell ' 

Unfairly  Attacked  by  Miss  Tarbell ^ 

Pratt,  Charles  M. — \ 

Party  to  Standard  Oil  Agreement, J 

Robinson,  C.  W. — j 

2 

Rockefeller,  John  I). — 

When  a School  Boy 


Born  in  1839 1 

Organized  Standard  Oil  Company 1 

Triumphs  in  1870 — 1882 1 

Indicted  in  Texas 2 

Rockefeller,  William — 

Party  to  Standard  Oil  Agreement 1 

Indicted  in  Texas ’ 2 

Rockefeller,  William  A.— 

Father  of  J.  D.  Rockefeller , . 1 

Sayers,  Gov.  Joseph  P. — 

His  Attitude  in  1900 4> 

Mr.  Pierce’s  Letter  to  him j 5 

Scott,  Jnd^e  Samuel  R. — 

Trial  Judge  in  Penalty  Suit 2- 


Party  to  Standard  Oil  Agreement . 16 

McKenna,  U.  S.  Justice — 

His  Ruling  in^Ouster  Case 27 

—62— 


INDEX — Continued 


Smith,  Tom  S.— 

Attorney  General  of  Texas  in  1900 

His  Attitude  Toward  the  Waters  Pierce 

Letter  to  J.  D.  Johnson 

Letter  to  Sec.  of  State  Lesueur 

Letter  to  Sec.  of  State  Hardy 

.Angry  at  Mr.  Pierce 

Partisan  .Attacks  .Against  him 

His  Letter  Demanding  Investigation 

His  Vindication  by  Legislature 

Standard  Oil  Agreement  of  188*2— 

Waters  Pierce  Not  a Party  to  It 

Before  Congress 

Excluded  by  Judge  R.  E-  Brooks 

Standard  Oil  Company — 

Did  Not  Create  Waters  Pierce 

Organized  in  1870 

Rapid  Grow  th  of 

Acquires  Stock  in  Waters  Pierce 

Its  Enormous  Holdings 

Did  not  Absorb  the  Waters  Pierce 

Its  Magnates  Indicted 

Yields  Control  of  Waters  Pierce 

Surprised  at  Expulsion  of  Waters  Pierce 

Power  of  Standard  Oil  Company 

Its  Many  Products 

The  Conference  w'ith  H.  C.  Pierce 

Ready  to  Quit 

Surrenders  Interest  in  Waters  Pierce 

Its  Command  of  the  Situation 

Described  by  Miss  Ida  M.  Tarbell 

Relations  with  Waters  Pierce 

Violates  its  Agreement  with  H.  C.  Pierce 

Relations  with  Waters  Pierce  Misrepresented 

How  it  Acquired  Waters  Pierce  Stock 

Supreme  Court  of  the  United  States — 

Decides  Against  Waters  Pierce 

Did  Not  Decree  Waters  Pierce  a Trust 

Did  Not  Pass  on  Constitutionality  of  Texas  Law. 

Refuses  to  Modify  Order 

Declares  Illinois  Law  Unconstitutional 

Tarbell,  Miss  Ida  M. — 

Her  Description  of  the  Standard 

Her  Mistakes  as  Historian 

rkington.  Booth — 

Describes  the  “Dangerous  Inadequacy  of  Words’ 

Taylor,  J.  W.— 

County  Attorney  of  McLepnan 

’Texas — , 

Sweeping^ature  of  Anti-Trust  Laws 

Passes  Ffrst  Anti-Trust  Law' 

Anti-T.>-{ist  Law  of  1895 

Grantapermit  to  Waters  Pierce 

Scandal  of  Fees  and  Commissions 

Loss  Of  Money  in  Litigation 

Power  of  Texas  Legislature.., 

Indiffe-ent  Over  Admission  of  new  Waters  Pierce  . 

Stands  by  Bailey  and  Tom  Smith 

Excit^  by  Charges  against  Bailey 

No  Bittijuess  against  Mr.  Pierce 

How  th<  State  is  Robbed  by  Trusts 

Investn(ents  in  by  Waters  Pierce 

Its  Attitude  Toward  Waters  Pierce 


Page 

...29 

.29-30 

...30 

...32 

...32 

...38 

...40 

...40 

...41 

...  5 
...15 
...25 

...  5 
...II 
...13 
...14 
...16 
...16 
...22 
...30 
...34 
...35 
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...36 
...36 
...37 
...40 
...42 
...47 
...48 
— 56 
...57 

16-25 

...16 

...27 

...30 

...49 

...42 

...58 

...21 

...23 

...  6 
...20 
...21 
...22 
...23 
...24 
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...40 
...44 
...50 
...53 
...55 
...58 


Thomas,  Cullen  F.— 

County  Attorney  of  McLennan 

Thompson,  \V.  P. — 

Sells  Waters  Pierce  Stock  to  Standard. 

Party  to  Standard  Oil  Agreement 

Director  in  Waters  Pierce 

Tilford,  W.  H.— 


Tinsley,  R.  P. — 

Takes  Place  of  J.  P.  Gruet ’. 

Usurps  Control  of  Waters  Pifrce 

Forced  Out  by  H.  C.  Pierce 

Tan  Buren,  M.  M. 

Waters  Pierce  Stock  Transferred  to  Him 

Son-in-law  of  J.  P.  Archbold 

Vanderbilt,  William  H. — 

Surrenders  to  Rockefeller 

Waters  Pierce  Oil  Company— 

What  Will  be  Proved  Concerning  it 

The  Two  Distinct  Companies 

Not  Convicted  as  a Trust 

No  Connected  History  Previously  Written 

Not  a Party  to  Standard  Oil  Agreement 

Territory  Covered  by  it 

Compared  with  Marshall  Field  & Co 

Early  Record  in  Texas 

Original  Texas  Permit 

First  Suit  Against  Old  Company 

Charges  in  Suit  of  1897 

Not  Ousted  Because  of  Standard 

Had  Right  to  Purchase  Rival  Plants 

Mistaken  Attitude  of  the  Public 

All  Offenses  Committed  Prior  to  1898 

No  Popular  Demand  for  Expulsion 

The  Old  Company  Died  in  1900 

Present  Company  Born  on  May  29,  1900 

Charges  Against  Present  Company 

Last  Meeting  of  Directors  of  Old  Company 

Unanimous  Vote  for  Dissolution 

Dissolution  Strictly  Legal 

Independent  of  Standard  Oil  Company 

Expulsion  Surprises  Standard 

Its  Position  in  1900 

Permit  to  New  Company  Could  Not  be  Refused. 

Campaign  of  Abuse  Inaugurated 

No  Popular  Demand  for  its  Destruction 

Forced  into  Politics 

Record  of  a “Lawless  Trust” 

How  Much  it  Could  Have  been  Fined 

Standard  Assumes  Temporary  Control 

Acquitted  of  all  Specific  Violations 

Analysis  of  its  Profits 

Cheapness  of  Oil 

Its  History  in  Pierce-Sayers  Letter.. 

Defended  in  Pierce-Campbell  Letter 

Baseless  Attack  by  Miss  Tarbell 

Waters,  William  H. — 

Becomes  Interested  with  Mr.  Pierce... 

Director  in  Waters  Pierce 


—63- 


Page 

...24.i 


14 

16 

16 


.48 


.43 

48 

.48 


.47 

.48 


...13 

...  5 

5 

...  5 
...  8 

...16 
...17 
...18 
...21 
...22 
...22 
...24 
...25 
...25 
...26 
...27 
...27 
.'..28 
...28 
...29 
...30 
...30 
...31 
^.-33 
...34 
...35 
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...39 
...40 
...40 
...41 
.41-49 
...48 
...52 
...53 
...54 
...54 
...56 
. . . 58 


12 

16 


THE  WATERS  PIERCE  CASE  IN  TEXAS 


By  FREDERICK  UPHAM  ADAMS 


